INVESTMENT ANALYSIS ON THE DEVELOPMENT OF FERRONICKEL SMELTER IN EAST HALMAHERA AS ONE OF INDONESIA’S NATIONAL STRATEGIC PROJECT

• Main Author: Ridwan Silaban, Daniel
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/60950
• Institution: Institut Teknologi Bandung

In 2015, the government of Indonesia injected fund in the form of Government Capital Injection (PMN) of IDR 3.5 trillion to PT Aneka Tambang Tbk. for the development a ferronickel smelter plant in East Halmahera, North Maluku. The project is called The Haltim Ferronickel Plant Development Project (P3FH) and it is listed in Indonesia’ National Strategic Project. The plant will produce ferronickel with a maximum production rate of 13.500 TNi per year. The construction of the project was started in 2017 with first production of ferronickel was scheduled in 2020. Unfortunately, the project was completely stopped due to the lack of electricity supply for the plant. ANTAM itself is still trying to expedite the provision of electricity supply in order to continue to project. The revised target for the first production is in 2022. This delay will affect the economics of the project and raising the concern if the project is not worth to be continued. This research will reevaluate the ongoing project of ANTAM’s ferronickel smelter plant in relation to the investment made by the Government of Indonesia. The output of this research will be used as economic justification to continue the project. Qualitative analysis such as PESTEL framework, Porter’s Five forces, and VRIO framework are used to evaluate the current business situation of the project externally and internally. Capital budgeting is used to evaluate the financial viability of the project. Sensitivity analysis on several economic parameters is also conducted to determine which parameter gives a significant impact on the economics of the project. The research shows that the estimated potential loss because of two years delay in production of ferronickel is USD 111 million at cost of capital 16%. However, continuing the project will still generate NPV of USD 6 million if the production can be started in 2022. This result indicates that continuing the development of ferronickel smelter plant in East Halmahera is still feasible and it can put ANTAM as one of the leading players in ferronickel smelting in Indonesia.