The government expects the holding to command more comprehensive business lines and strong financial strength, reducing its reliance on government capital injections to support expansion. (GA Photo/Mohammad Defrizal)
Govt. Plans to Establish Mining Holding Company on Track With New Deal
BY :RIDHO SYUKRA & DION BISARA
JANUARY 09, 2016
Jakarta. Government plans to establish a holding company for state-owned miners by the end of 2019 has received another push in the right direction with two major miners consolidating.
The holding company would consolidate gold and copper miner Aneka Tambang with coal miner Tambang Batubara Bukit Asam, tin producer Timah and aluminium maker Indonesia Asahan Aluminium to make a giant entity with about $2.5 billion in market capitalization.
The government expects the holding to command more comprehensive business lines and strong financial strength, reducing its reliance on government capital injections to support expansion.
"We emphasize state-owned enterprise's financial independent and we hope that it would be a giant not only in this country but also globally," State-Owned Enterprises Minister Rini Soemarno said on Friday.
A road-map document detailing the plan will be ready by the end of this year, she said, with full integration expected to place within three years.
Indonesia has pushed state-owned enterprises to consolidate and become agglomerations of expertise and capital, making operations more efficient and expansion easier.
Still, vested interests and a long history of competition among SOEs stands in the way of integration.
The country has only rare success in this area. In 2013, five cement companies under Semen Indonesia merged after two decades of conflict — which saw employees pitted against directors, the central government against regional governments and local business against foreign investors.
Still, the miners have paved the way for integration with join-projects which maximizes each other strength, Rini said.
On Friday, Bukit Asam and Antam agreed to allow the former build the power plant for Antam's ferronickel plant in East Halmahera. Antam also secured cooperation with Inalum to build a smelter-grade alumina smelter in Mempawah, West Kalimantan.
"There are so many potential projects that they can work together," Rini said.