Antam to finalize Herald bid

By Fitri Wulandari

JAKARTA (Reuters) - Indonesia's state-owned mining firm, PT Aneka Tambang Tbk (ANTM.JK: Quote, Profile, Research, Stock Buzz), said on Wednesday it expected to finalize a bid for Australian miner Herald Resources Ltd (HER.AX: Quote, Profile, Research, Stock Buzz) and acquire other gold assets this year.

Dedi Aditya Sumanegara, Antam's president director, said that an expected firm nickel price this year would help raise sufficient funds to finance its acquisition plans.

"Our strategy this year is to complete our M&A program," Nickel prices are likely to remain good this year which will help us to have strong cash," Sumanagara said at this week's Reuters Global Mining Summit.

Sumanagara said nickel prices may remain firm this year at around $14 per pound ($30,865 a tonne), although it would be lower than $16.2 per pound in 2007, on concern that global economic worries may dent demand from stainless steel makers.

He said surging metal prices have allowed the firm to book net cash of $500 million this year.

Antam and China's Shenzhen Zhongjin Lingnan Nonfemet Co Ltd 000060.SZ has bid around A$500 million for Australian miner Herald Resources Ltd (HER.AX: Quote, Profile, Research, Stock Buzz).

The company is also in the process of short-listing a number of gold producing assets as part of a plan to step up gold and bauxite business while reducing reliance on nickel.

But Sumanegara declined to name a potential gold acquisition target.

Last month, the company announced it may buy up to 18.72 percent of the shares of Freeport McMoRan Copper & Gold Inc's (FCX.N: Quote, Profile, Research, Stock Buzz) Indonesia unit in a deal expected at about $3 billion.

Sumanegara said the company will also speed up a number of projects which will help the firm to sustain growth when the price of nickel, a key ingredient for stainless steel, falls.

The projects include a nickel pig iron project on Maluku island with China's Tsingshan Holding group as well as a $1.5 billion project to build bauxite and alumina facilities on Kalimantan island jointly with United Company RUSAL.

Sumanagara said nickel prices may fall gradually to $8-9 per pound by 2010 as supply from new projects, including

Goro nickel in New Caledonia owned by the Brazilian miner Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz) (RIO.N: Quote, Profile, Research, Stock Buzz) will enter the market.

Nickel prices have weakened as global economic worries re-emerged and analysts said high inventory levels would continue to weigh on global nickel prices.

The price of nickel MNI3 at the London Metal Exchange closed at $31,550 per tonne on Tuesday, retreating from a three months high of $34,050 a tonne on March 3.  Continued...