JAKARTA (TheInsiderStories) – Indonesian miner, PT Aneka Tambang Tbk (IDX: ANTM), need funds around US$1.4 billion to dredge the Wabu gold mines in Papua. As reported, state own enterprises minister, Erick Thohir, has proposed to use the ex-mines belong to PT Freeport Indonesia (PTFI) for the unit of PT Indonesia Asahan Aluminium (MIND ID).
In early July 2015, PTFI returned 90,360 hectares of the block to the central government as part of the amendment to the work contract. Currently, ANTAM digging the gold from a mine located in Gunung Pongkor, West Java. However, this mine’ contract will expired in 2021.
The Pongkor mine has been operating since 1994. Until December 2018, the issuer has gold reserves weighing 19 tons and gold resources equivalent to 42 tons. The CEO, Arie Prabowo Ariotedjo, reserves at the mine had diminished and were expected to run out within two to three years time.
However, the company sees that there is still potential for additional reserves from the new excavations at the mine, therefore the producer plans to apply another 10 years permit for the mine. Pongkor’ gold reserves are estimated to reach 3.3 million tons ore or equivalent of 12 tons of gold.
At the same time, CEO of MIND ID, Orias Petrus Moedak, told the house speakers on Tuesday (09/29), that PTFI had recorded a net profit of $94 million and revenues $1.16 billion during the first half of this year. The things that supported the subsidiary’ income was the increase in the selling price of gold and copper.
By the end of June, Freeport had produced 321 million of copper and sold 299 million of copper with an average selling price of $2.5 per Lb. As for gold, the company had produced 340,000 troy ounces (oz) with sales of 319,000 oz. The average selling price was $1,709 per oz of gold.
While, silver production reached 1.42 million oz and sales volume 1.33 million oz with the average selling price at $16 per oz. Moedak also explained that MIND ID performance would record negative growth due to the COVIC-19 and the fallen of commodity prices.
On a consolidated basis, he reported, the holding company lost nearly to Rp2 trillion. Except for gold and copper, said Moedak, the price of other commodities has declined. The price of gold has actually increased 25 percent since the beginning of this year, while, the price of aluminum fell by 12 percent, coal corrected by 9 percent, bauxite minus 7 percent, and tin has fallen at most, around 19 percent.
Not only affected the financial performance, he also mentioned, that the biggest project to be worked like copper smelter or precious metal refinery owned by PTFI had postponed. The $3 billion project is in the process of submitting a postponement to the energy and mineral resources due to the impact on copper export permits.
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