Nickel and gold miner PT Aneka Tambang (Antam), said on Monday that it will cut ferronickel output in 2009 by 32% on the year to 12,000 metric tons due to lower nickel demand in Europe and South Korea, its two main customer bases.
The company also said it will take advantage of lower nickel demand to shut one of its smelters already operating at 80% of capacity in the second half of the year for three months to perform care and maintenance.
"Lower global nickel demand is largely attributed to worsening global economic conditions," the company said in a statement. "Stainless steel industries, and its end use industries such as automotive and construction, are forced to cut production inline with fears of global economic recession."
To anticipate lower nickel demand, Antam said it will reduce ferronickel output in 2009 in order to preserve cash. In 2008, Antam produced 17,566 tons of ferronickel.
"As a price taker, our financial performance in 2008 was impacted negatively from lower commodities prices," said Antam's President Director, Alwin Syah Loebis.
The average selling price of nickel ore decreased by 26% to $57.71 per wet metric tons in 2008, the statement said.
The Indonesian government owns a 65% of Antam.
Source: Dow Jones
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