JAKARTA -- Indonesian state-owned miner Aneka Tambang, better known as Antam, said Wednesday it earned a net profit in 2016 after two years of losses thanks to increased nickel production and higher prices.
But the profit of 64 billion rupiah ($4.8 million) was only a small fraction of the 2.2 trillion rupiah in losses Antam racked up during 2014 and 2015 after the government's ban on raw mineral exports devastated the company's fortunes. Uncertainty over the impact of a new regulation that potentially lets Antam resume exports also has weighed on the company's stock price, which recently hit a five-month low.
Revenue fell 14% to 9.1 trillion rupiah on a decline in gold sales, which make up more than half of Antam's overall revenue. But the miner cushioned the drop by boosting production of ferronickel, used to make stainless steel, from its smelter in Sulawesi. Nickel ore sales also jumped due to an expansion of domestic smelter capacity. The company enjoyed a rally in benchmark nickel prices amid concerns of a reduced supply after the Philippine government threatened to shut down mines over environmental concerns.
Antam said it targets another 19% increase in ferronickel production this year.
"With an estimated increase in production and sales in 2017, the commodity price outlook positive as well as the completion of downstream projects in one to two years, Antam has a solid future for providing good returns to stakeholder interests," President Tedy Badrujaman said in a statement.
Antam is tasked with carrying out the Indonesian government's vision to develop a downstream mining sector, with plans to build a factory for stainless steel. But the ban on nickel ore exports since January 2014 hit profits hard, prompting the government to inject capital to maintain the company's investment into downstream projects.
The government introduced regulations in January that will let Antam export nickel ore under certain conditions. Though the announcement temporarily boosted the company's prospects, uncertainty around its production plans caused the stock price to fall back.
The regulations, which laid out new export rules for foreign miners, also may have unexpected repercussions. U.S.-based Freeport-McMoRan, which was in negotiations with Antam to jointly develop an anode slime smelter, is engaged in a high-profile dispute with the government over the new rules.