JAKARTA: PT Aneka Tambang Tbk (Antam) prepares to generate new external financing as much as US$650 million, or IDR5.85 trillion, to get 65% investment in smelter grade alumina project in Mempawah, West Borneo.The plan was arisen after the signing of US$292.5 million-credit facility agreement between the state-controlled nickel and gold miner, and three Japanese banks to finance US$450 million project in converting bauxite to chemical grade alumina (CGA) Tayan.Antam President Director Alwin Syah Loebis said that with value of US$1 billion, the project Smelter Grade Alumina in Mempawah is certainly a bigger project than CGA Tayan.This year, we are completing the financial review and next year we will start running the project. Usually, the portion of external funding needed is as much as 65% of the total project while the rest will be covered by equities, he told Bisnis yesterday.To run the project worth as much as US$1 billion, Antam cooperates with some partners to inject equities of US$350 million while the remaining needed fund will come from external, such as bank loans and bonds.Alwin Syah said that the company is running a due diligence and considering contractor selection for modification, procurement, construction, including picking external funding source.On July 20, Antam and Hangzhou Jinjiang Group will sign a joint venture agreement (JVA) to work on Mempawah project.The Chinese company holds 51% shares and the rest belong to Antam, which can increase its ownership in the venture after the plant operates commercially for 3 years.Antam Finance Director Djaja M. Tambunan added that the company is considering withdrawing bank loans to finance the project with capacity of 1.2 million ton.Mempawah project will start next year. The percentage of fund has not been certain but we are considering bank loans. It is OK, isnt it? he said.Alwin added that this year the company expect to mine 3 million ton gold, increasing from 2.7 million ton during last year. With the trend of rising gold and nickel prices at the moment, he believed that income and profit of this year would grow.The companys ANTM-coded stock was traded at IDR2.100, sliding 1.18% at closing yesterday. Market capitalization of the state-controlled mining company was IDR20.27 trillion.DividenAlwin said that the company proposed the dividend payout ratio around 30% to 50%, similar to that of the previous years. Dividend ratio is as usual, we propose between 30% and 50%, he said.The range of dividend equals to IDR498 billion IDR830 billion, which is drawn from Antams 2010 net profit of IDR1.66 trillion. The payment of dividend is discussed in a shareholders meeting scheduled today.The company signed the US$292.5 million- credit facility for financing chemical grade alumina Tayan project from Japan Bank for International Corporation [JBIC], Mizuho Corporate Bank Ltd., and Sumitomo Trust and Banking Co. Ltd.Tayan project, which needs US$450 million or IDR4.05 trillion, is expected to start operating in 2014. The project will process Antams bauxite reserves into 300,000 ton CGA annually.We cannot tell the interest rate and tenor of the loan considering the confidentiality of the agreement. What certain is that this is a long term loan, Alwin said. (t04/msw)

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