Antam says `hard' to complete mine stake purchase amid crisis
Source: 13-OCT-2008 Intellasia | Bloomberg
Oct 13, 2008 - 7:00:00 AM PT Aneka Tambang, an Indonesian state-owned mining company, said it may be hard to complete the planned US$66.5 million purchase of a stake in a gold and silver mine owned by OZ Minerals Ltd as banks stop lending.

``I don't think anyone will support us financially in this condition,'' President director Alwin Syah Loebis said today in a phone interview. ``It's going to be hard'' to go through with the purchase, which was announced in June, he said.

Companies worldwide are reviewing expansion plans as the global credit crisis chokes off lending, threatening economic growth. Indonesia halted stock-market trading today for a second day and the rupiah is set for its worst weekly loss since 2006.

Antam had planned to borrow US$42.2 million, Bisnis Indonesia reported on October 6, to expand its gold-mining business by buying the 10% stake in the Martabe gold and silver mine run by OZ Minerals, the world's second-largest zinc mining company.

Money market rates in Asia's biggest financial centres have risen to their highest in at least nine months even after Hong Kong and China lowered borrowing costs.

Before trade was halted on October 8, Antam shares had plunged 77% this year as metal prices tumbled, including nickel, its principal product. Three-month nickel futures slumped as much as 10% today to US$12,050 a metric tonne in London.

``We don't want to rush in with the plan,'' Loebis said from Jakarta. ``It's better to focus more on our main projects, like the Tayan alumina plant.''

The company has secured a US$325 million loan commitment from the Japan Bank for International Cooperation to build the alumina plant in East Kalimantan, Loebis said on September 16.

The company is also completing a plan to buy back shares after the government temporarily eased rules for stock purchases, Loebis said.