Antam to increase spending

Indonesia's PT Aneka Tambang plans 3 trillion rupiah (US$265.4 million) this year in capital expenditures, up three-fold on 2008, to position itself for an eventual recovery in commodity prices, its chief executive said on Thursday.

"We think that it is the best time to start our profitable investment, which may be sold when prices of commodities recover hopefully within the next 2-3 years," Alwin Syah Loebis said.

The state mining company said more than 80% of the spending, which will be funded from internal cash, will be used to further develop its plants, including improvements to its ferronickel smelter III in Pomala in south east Sulawesi.

The firm's unaudited financial report showed actual capital expenditures last year were 758 billion rupiah.

Mr Loebis also said Antam expected ferronickel output, its biggest contributors of revenue, to fall by 30% to 12,000t this year as prices for commodities and demand ease in the face of the global economic downturn.

"We assume the average nickel price this year will range from US$11,000-US$12,000/t, from an average of US$18,000/t last year," said Mr Loebis, who refused to elaborate on revenue forecasts for this year.

Antam, 65%-owned by the Indonesian government, is involved in the exploration and production of nickel ore, smelting of ferronickel, production and refining of gold, silver, bauxite and iron sands.