The government plans to establish six holding companies in the first half of the year. One of them will consolidate state miners like Bukit Asam (PTBA), Aneka Tambang (ANTM), Timah (TINS), and INALUM. The likely outcome?
Our source at state-owned enterprises ministry said INALUM will likely be appointed operating holding for state miners. The government will also transfer its ownership in PT Freeport Indonesia into INALUM, including possible purchase of additional shares in the Grasberg gold and copper mine.
“We do hope state miners will get more from companies like Freeport Indonesia,” said the source.
Well, on Monday, ANTM announced the signing of MoU with PT Freeport Indonesia and PT Smelting (JV between Freeport and Mitsubishi Materials) for the development of anode slime plant and gold refining facility. As to whether INALUM will be allowed to purchase more Freeport shares, it depends on political process between the government and House of Representatives (DPR) and between central and regional governments (Papua).
“ANTM and TINS may focus on metals, while their coal business can be transferred to Bukit Asam,” the source added.
ANTM currently controls PT Indonesia Coal Resources (ICR), which had total assets of Rp217 billion. Last year, the coal unit generated sales revenue of Rp169 billion only, down from Rp179 billion in 2014.
TINS, meanwhile, controls PT Tanjung Alam Jaya (TAJ), which had coal assets of Rp242 billion late last year. Other than TAJ, which has 9521 hectares of coal concession in South Kalimantan, TINS controls TBBE which has coal concession in Muara Enim, South Sumatra. Coal business generated Rp127 billion of revenues for TINS last year, dropped from Rp181.2 billion in 2014. This segment suffered Rp36.5 billion of losses last year.
Consolidation of coal business between ANTM, Bukit Asam, and TINS is expected an immediate outcome of the holding of state miners. They are also expected to work closer with state electricity provider PLN for their future power supplies.
The operating holding is also expected to have the capacity to raise funding for projects planned by operating subsidiaries. For example, INALUM and ANTM can establish a joint venture to develop the smelter grade alumina (SGA) in Mempawah, West Kalimantan. SGA from Mempawah will allow INALUM to boost its aluminium production capacity.
ANTM and Bukit Asam (PTBA) have actually joined forces in the development of ferronickel smelter in Halmahera, North Maluku, wherein Bukit Asam supplies power generation. Such partnerships can easily be promoted under the new holding structure.
The question, of course, how fast the holding is established to give credibility to the whole program. So far, we haven’t seen strong opposition from within these state mining companies. Neither we see opposition from politicians and the powerful workers union. As for public shareholders of ANTM, PTBA, and TINS, they might expect the holding (INALUM) to be a listed entity to ensure transparency. IPO of INALUM, however, might await improvement in metals market.
DISCLAIMER: NO POSITION IN STOCKS MENTIONED IN THIS ARTICLE
