JAKARTA (TheInsiderStories) – A joint venture company (JVC) between PT Aneka Tambang Tbk. (IDX: ANTM) and Eastern Star Resources Pty. Ltd., PT Sumbawa Timur Mining found the potential size of copper-gold in Onto, Sumbawa, West Nusa Tenggara. The unit of Brazilian multinational corporation, Vale SA, is a seventh generation contract of work (CoW) holder for the Hu’u Project in Dompu.
Onto mineral resource deposit was first discovered in August 2013. Since then 64 drilling holes (equivalent to 61,000 meters) have been carried out to determine size, area and characteristics of mineral resources. In February 2020, the miner announced the drilling results with a potential content of 1.7 billion tones of mineral resources with a copper grade of 0.89 percent and gold 0.49 g/t.
As of December 2019, he continued, the total designated mineral resources are 760 million tons (MT) of copper and gold with total inferred mineral resources are 960 Million tons of copper and gold. This figure is equivalent to a total of 1.7 billion tons copper and gold.
“This includes an extraordinary 100 meter gold intercept with a copper grade of 5.99 percent and gold 1.11 g/t. The Hu’u Project is currently in the exploration stage, and we hope to continue this project with the aim of building a world-class mining operation in Indonesia,” said Bede Evans, president director of Sumbawa Timur in an official statement on Thursday (10/22).
The company has completed the CoW amendment negotiations with the government on May 7, 2019, as a basis for the company to continue exploration activities to determine mineral resources and reserves in the mining areas. In the JVC Eastern Star Resources hold 80 percent of the participating interests and ANTAM 20 percent.
So far, through Sumbawa Timus, the miner has invested $122 million in Indonesia. Beside the copper and gold projects, Vale also other local unit, PT Vale Indonesia Tbk (IDX: INCO). Joined with ANTAM, both parties collaborating to build smelter in the country with total cost $5 billion.
According to the vice president director of INCO, Febriany Eddy, the investment funds will be used to develop two new smelters in Bahodopi, Morowali, Central Sulawesi) and Pomalaa, in Kolaka, Southeast Sulawesi. Beside with Brazil, Vale Indonesia in talks with potential investor from China to build Bahodopi smelter. The discussion on going to decide who’s become the controlling shareholder in the joint venture company, she adds.
Bahodopi smelter will have output 700,000 tons per annum. Inline with the smelter development. She added, the company has pocketed exploration permit and now waiting for the exploitation permit and the contract extension.
While, smelter and mines in Pomalaa is estimating need investment $2.8 billion while projects in Bahodopi need costs up to $2.1 billion, including mines. As for expansion in the existing projects, Sorowako mining in East Luwu, South Sulawesi projected need funds $400 million.
While, Antam joined with its parent PT Indonesia Asahan Aluminum (MIND ID)) have started the construction of bauxite ore to alumina processing smelter project in Sungai Kunyit, Mempawah, West Kalimantan. The project investment is estimated at $850 million and is equipped with a steam power plant of 3×25 megawatts.
The two companies has formed a joint venture company, PT Borneo Alumina Indonesia (BAI) to run the project. With this project, he said, MIND ID, which has the only aluminum refining plant in Indonesia, will get a supply of alumina and made savings $200 million.
Through the unit, the construction of the Smelter Grade Alumina Refinery will begin soon. This smelter with an initial capacity of 1 million tons per year is expected to be able to operate early 2020.
The construction of this smelter is expected to reduce exports of raw minerals and reduce dependence on imports for sources of raw materials for aluminum production.
Indonesia is rich in mineral deposits. There are currently six new high-pressure acid leaching plants around the world that can produce 220,000 tons of battery-grade nickel a year, 70 percent of which are deployed in Indonesia. Chinese companies have also seized the opportunity to develop the Indonesian nickel market, the report said.
President Joko Widodo’ government is planning to spend billions of dollars building aluminum and nickel smelters at home as it seeks to reshape the domestic mining industry and curb exports of raw materials while reducing its dependence on imports of finished metals.
This is because Indonesia’ own mining raw materials have been exported for decades, forcing the Southeast Asia biggest economy to rely on costly imports to meet demand.
Indonesia is likely to impose a ban on raw ore exports in 2022, pushing miners to process minerals at home. Under the 2017 mining regulations, Indonesia plans to suspend exports of raw ore on January 12, 2022, after giving miners five years to build smelters in the country.
It is expected that 41 smelters will operate in 2022, including 22 nickel smelters, 6 bauxite smelters, 4 iron ore smelters, 4 zinc smelters, 2 copper smelters, 2 anode slime smelters, and 1 manganese ore smelter.
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