Company Overview - Description and Objectives

DESCRIPTION AND OBJECTIVES
Antam is a vertically integrated, export-oriented, diversified mining and metals company. With operations spread throughout the mineral-rich Indonesian archipelago, Antam undertakes all activities from exploration, excavation, processing through to marketing of nickel ore, ferronickel, gold, silver, bauxite and iron sands. The company has long term loyal blue chip customers in Europe, Australia and Asia. Due to the vastness of the company’s licensed exploration areas as well as its known large holdings of high quality reserves and resources, Antam has formed several joint ventures with international partners to profitably develop geological ore bodies into profitable mines.

The company generates healthy cash flows, and has prudent capital management. The company became a limited liability state-controlled company in 1968 with the merger of several single commodity mining companies. In 1997, the company conducted an initial public offering (IPO) and listed its shares on the Jakarta and Surabaya Stock Exchange and 35% were sold by the government to the public, to raise money for a ferronickel expansion. In 1999, Antam listed its shares in Australia as a foreign exempt entity and then in 2002 augmented its status to the more stringent ASX Listing.

Top Objective: Enhancing Shareholder Value
Prior to listing its shares in the 1997 IPO and exposing itself to the capital market, Antam’s objective was to follow the directives of the state. After the IPO Antam’s objectives are now centered on increasing shareholder value. The company’s main objective is to enhance shareholder value by lowering costs while profitably expanding operations in a sustainable manner.

The strategy maintains focus on Antam’s core business of nickel, gold and bauxite with a view to maximizing output in order to increase cash generation and lower unit costs. Antam plans to sustain growth through reliable expansion projects, strategic alliances, increasing quality reserves and adding value by moving away from selling raw materials and increasing processing activities. Antam will also maintain financial strength. By generating as much cash as possible Antam ensures it will have sufficient funds to repay debts, finance continued growth and pay dividends.

Lowering costs means operating more efficiently and productively, as well as increasing capacity to benefit from economies of scale. Recent fuel price increases have made this a very important part of realizing Antam’s objectives and Antam will seek cheaper sources of fuel.

Expanding operations also means moving further downstream into processing and refining rather than selling raw materials. To achieve its objective, if necessary, Antam will form strategic partnerships with international companies, primarily to assist with the financing and technology. To ensure sustained growth, Antam invests 5% of the previous years export revenues in exploration, through its exploration division, Geomin. As well, Antam prevents business interruptions and ensures sustainability by maintaining good relations with local communities and implements a high standard of environmental management.

Antam’s ferronickel expansion, FeNi III, is an example of pursuing this objective. Starting commercial operations from the first quarter of 2006, FeNi III will double Antam’s nickel output, which will be purchased through one ten year and one eleven year offtake agreements, while lowering unit costs of production. Another example of pursuing this objective is the Tayan Chemical Grade Alumina project, to begin commercial operations in 2009. Following FeNi III, Antam plans to move downstream into processing its vast bauxite reserves by building and operating, together with international partners, a chemical grade alumina plant.

Antam’s long term plans to increase shareholder value by lowering costs and expanding operations profitably and sustainably are to jointly develop its high grade nickel ore reserves in Buli, North Maluku using traditional smelting technology with a project called FeNi IV, which may begin operations in 2010. At around the same time, with another group of partners Antam plans to develop Buli’s low grade ore reserves using the new technology of High Pressure Acid Leaching, which can be used to profitably process previously uneconomical ore.

How Antam Generates Cash
The company makes its cash by exploring and discovering mineral deposits, extracting them and processing them as economically and correctly as possible and selling them to long term loyal customers in Europe and Asia. Antam has been doing this profitably since its inception in 1968 and plans to continuing doing this for many years ahead.