Banks Arrange $330m Loan for Alumina Smelter in Kalimantan

Bank of China Jakarta and Bank OCBC NISP were appointed to help arrange a loan of $330 million to finance the construction of an alumina smelter in Kalimantan.

In a filing by Cita Mineral Investindo to the Indonesia Stock Exchange (IDX) on Wednesday, the Jakarta-listed bauxite miner said Bank OCBC NISP and Bank of China Jakarta would act as lead arrangers for the $330 million loan facility to the Well Harvest Winning Alumina Refinery.

Cita Mineral said the size of the loan could be increased to $400 million.

Bank DBS Indonesia will also be involved in arranging the loan facility.

“The loan will be used to finance the alumina processing and refinery plant of Well Harvest Winning,” the statement said, signed by Citro Utomo, president director of Cita Mineral Investindo.

The loan will mature in 12 months with the interest rate set at 3.55 percent above Libor for the local lenders in the syndication and 3.25 percent above Libor for foreign lenders. The one-year Libor stands at 0.55 percent this week.

Well Harvest is investing $1 billion in a smelter plant that will have an annual capacity of 2 million tons of alumina, with the initial 1 million production capacity scheduled to be operational mid-2015.

Cita Mineral controls 25 percent of Well Harvest Winning. China Hongqiao Group controls 60 percent of the unit, 10 percent is controlled by Winning Investment from Hong Kong and the balance belongs to Danpac Resources Kalbar.

Cita Mineral is in turn owned by Harita Group, a conglomerate group controlled by businessman Lim Gunawan Hariyanto.

Most bankers expect loan distribution to slow down this year due to a slow-down in economic growth and a tightening of liquidity in the Indonesian market.

Bank Central Asia director Dahlia Ariotedjo said separately on Wednesday that the need for companies to build smelters could boost corporate loans in Indonesia.