Mitrais Mining

August 2019 | Vol. 33


Optimize your commercial outcomes from source to sale


Weekly News

Indonesia’s Coal Reference Price Up Slightly in August

The government has set the country’s coal reference price (HBA) for August at US$72.67 per ton, a slight increase from $71.92 per ton the previous month.

Energy and Mineral Resources Ministry spokesman Agung Pribadi said little change was expected in coal prices on the world market this month. “The market is relatively the same as the previous month, no changes yet,” he said.

Separately, Indonesian Coal Mining Association (APBI) spokesman Hendra Sinadia said the slight increase in August’s HBA was due to higher demand from China for Indonesia’s low and high calorie coal.  “China needs additional supply from Indonesia to cover the decline in supply from Australia,” he said.

Agung further explained that the country’s HBA was based on a number of coal price indices in the international market, such as the Indonesia Coal Index (ICI), Newcastle Global Coal (GC), Newcastle Export Index (NEX) and Platts59.

Coal prices have been down since last October, when prices stood at $100.89 per ton. The drop has been caused by China’s policy to cut coal imports and Russia’s increase in coal exports to Asia.

Indonesia’s coal exports to China have ranged between 110 and 120 million tons annually, accounting for 25 percent of total coal exports, making China Indonesia’s biggest coal importer.

Source :

Weekly News

Darma Henwa Revenue Grows 11% in First Half of 2019

PT Darma Henwa Tbk (DEWA) successfully achieved 11.67% revenue growth to US$129.57 million by the end of the first semester of 2019. While in the same period last year, company’s revenue was US$116.02 million.

Operation of Bengalon Coal Project owned by PT Kaltim Prima Coal mainly contributed Darma Henwa’s revenue. Until June 2019, earnings from Bengalon Coal Project increased by 29.03 percent to US$92.34 million. Furthermore, Asam-Asam Coal Project owned by PT Arutmin Indonesia contributed US$32.34 million revenue and Satui Coal Project owned by PT Cakrawala Langit Sejahtera gave US$4.26 million earnings.

Beside that, mining infrastructure project undertaken by company also gave positive contribution. By the end of June 2019, PT Dairi Prima Mineral and PT Citra Palu Mineral respectively contributed Darma Henwa’s revenue by US$593.212 and US$25.473.

Company’s gross profit increased sharply by 850.59% from US$920,479 to US$8.84 million. Increase of the gross profit was caused by the improvement of Darma Henwa’s efficiency and productivity. Thus, Darma Henwa’s net loss declined from US$2.12 million in June last year to US$1.57 million in June this year, impacted by foreign exchange loss.

The assets increased from US$415.09 million to US$495.61 million, due to additional of spare part supplies for heavy equipment repairs. Moreover, other current assets increased by 920.31 percent from US$7.21 million to US$73.63 million, including advance of loan received from PT Bank Rakyat Indonesia Tbk, used especially for heavy equipment repair facility in Bengalon Project and Asam-Asam Project.

Darma Henwa received US$115.86 million loan facility, in both US Dollar and Rupiah currencies, from BRI on April 22nd. The loan was utilized for refinancing, mining equipment purchase, also operational and working capital needs. By the addition of bank loan that supports company’s performance, liabilities by June 2019 increased from US$184.29 million to US$266.37 million.

As a result, company’s total bank loan rose from US$ US$7.55 million in June last year to US$116.57 million in June 2019. However, Darma Henwa was able to compress lease payables by 46.58% from US$7.01 million to US$3.74 million because company’s payment on its schedule.

Until the first semester of this year, Darma Henwa has spent US$10.52 million capital expenditure. The capital expenditure realization was dominated by purchases of machine and equipment for US$10.28 million.

Operational Performance

During first semester of 2019, company’s coal delivery grew more than 20% to 7.13 million tons compared to the same period last year at 5.94 million tons. From the figure, Bengalon project contributed the biggest by 4.06 million tons, Asam-Asam project contributed 2.64 million tons, and Satui project at 417,817 tons.

Darma Henwa produced 45.83 million bcm overburden from January to June 2019. Furthermore, company’s coal production reached 6.77 million tons. Bengalon coal project produced 3.88 million tons, Asam-Asam coal project produced 2.64 million tons, and Satui coal project produced 240,371 tons.


Weekly News

ICI 4 Coal Derivatives Make Brisk Start to The Week

A total of 25,000t of ICI 4 coal derivatives were cleared on the CME during Asia-Pacific business hours today, amid further signs that the market is softening.

Of today’s trades, a 5,000t August clip traded at $33.05/t, down from the last Argus-assessed price for this month on 31 July at $33.80/t. A 5,000t September clip traded at $32.50/t, down from the last Argus-assessed price for this month at $33.75/t on 2 August. A total of 15,000t of fourth-quarter 2019 contracts also traded today, with 5,000 t/month done for October, November and December at $33/t each. This was down from the last Argus-assessed settlement price for fourth-quarter 2019 contracts at $34.40/t on 2 August. All of today’s trades were brokered by Singapore-based Evolution.

In terms of bids and offers, August ICI 4 was offered today at $32.85/t, although there were no corresponding bids. September contracts were bid at $32.25/t and offered at $32.75-32.85/t with different Singapore-based brokers. August and September contracts were offered as part of a package at $32.85/t, although there were no corresponding bids.

Despite the relatively brisk trade in the ICI 4 derivatives market, the physical Indonesian market made a typically slow start to the week. Market participants are waiting for details of a Chinese utility tender to emerge either later today or tomorrow, which may give a better sense of price direction.

Bid and offer levels for August-loading geared Supramax cargoes were little changed from late last week, with most bids around $32/t and offers around $33/t.

Argus last assessed fob GAR 4,200 kcal/kg prices at $33.13/t on 2 August, down by 36¢/t from the previous week.

In the Australian market, September-loading Capesize cargoes of NAR 5,500 kcal/kg coal were offered in a $50-51/t fob Newcastle range for sale to China only.

Bids were scarce in the Chinese market, but a non-Chinese buyer bid $49.50/t fob Newcastle for a September-loading Panamax cargo. The NAR 5,500 kcal/kg market was assessed most recently by Argus at $50.10/t fob Newcastle on 2 August.

In the China domestic spot market, tradable prices of domestic NAR 5,500 kcal/kg coal remained at around 590-595 yuan/t ($83.80-84.50/t), largely unchanged from late last week.

In China’s futures market, the September contract on the Zhengzhou commodity exchange closed at Yn577/t today, down by Yn3.60/t from 2 August.


Weekly News

Indonesia Sets August HBA Thermal Coal Price at $72.67/mt, Up 1% on Month

Indonesia’s Ministry of Energy and Mineral Resources set its August thermal coal reference price — also known as Harga Batubara Acuan, or HBA — at $72.67/mt, up 1% on month but down 32.6% on year.

Chinese import restrictions on shipments have continued to drag thermal coal prices lower.
The ministry had set the price for July at $71.92/mt, and for August 2018 at $107.83/mt.

The HBA is a monthly average price based 25% each on Platts Kalimantan 5,900 kcal/kg GAR assessments, Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), Newcastle Export Index (6,322 kcal/kg GAR) and globalCOAL Newcastle (6,000 kcal/kg NAR).

In July, the daily Platts FOB Kalimantan 5,900 kcal/kg GAR coal assessment averaged $65.97/mt, down from $66.93/mt in June, while the daily 7-45 day Platts Newcastle FOB price for coal with a calorific value of 6,300 kcal/kg GAR averaged $72.06/mt, up from $69.17/mt in June.

The HBA price for thermal coal is the basis for determining the prices of 77 Indonesian coal products and for calculating the royalty producers have to pay for each metric ton of coal sold.

It is based on 6,322 kcal/kg GAR coal with 8% total moisture content, 15% ash as received and 0.8% sulfur as received.


Weekly News

World Moves Sway From Coal, And So Does ADB

The Asian Development Bank (ADB) has said it is staying away from coal-related projects in Indonesia and continues to open itself to gas and renewable energy investments, joining the wave of diversion by hundreds of financial institutions around the globe.

Yuichiro Yoi, ADB unit head for Indonesia, infrastructure finance division 2 private sector operations dept., told The Jakarta Post that economic factors and public sentiment were the two reasons to avoid coal investment.

“The world’s moving away from coal, that’s the sentiment I can’t change or deny, that is the sentiment in the majority of the world. I just have to play along,” he said on the sidelines of a gas exhibition in Jakarta on Thursday.

“If it [coal power plants] become a stranded asset, it is a credit risk. Going forward it’ll be more difficult to do a project with coal. Now you not only worry about reputation but also have to worry about the risk of losing money.”

Reports from global energy think tank Institute for Energy Economics and Financial Analysis (IEEFA) in February showed that over 100 globally significant financial institutions have divested from thermal coal, including 40 percent of the top 40 global banks and 20 globally significant insurers.

They are increasingly reluctant to invest in companies related to fossil fuels as the commodities are deemed unsustainable amid rising pressure to limit environmental damage.

In May, Norwegian pension fund manager KLP sold bond and equity exposure worth 3.2 billion crowns (US$366 million) in 46 companies after a decision to withdraw from thermal coal, Reuters reported. The fund divested its stake in BHP, Anglo American, Glencore and Vale, as well as its shares in publicly listed diversified conglomerate PT Astra International and subsidiary PT United Tractors, whose core business is coal mining and heavy equipment.

In March, BNP Paribas Asset Management stated it would stop investing in companies in which 10 percent of their revenue comes from thermal coal.

Yuichiro further said that to date the ADB had yet to issue a written policy against coal, like many other global financiers, but experience has shown him that coal-related projects are hard to be approved by the bank’s system.

“If there’s any chance to do a coal-fired power plant, there’s a need to be an extremely good story in terms of impact, that outweighs the negative connotations of doing a project with coal,” he said, adding that the ADB only has gas and renewable energy projects in Indonesia, particularly geothermal power plants.

Cumulative investment from the ADB in Indonesia’s energy sector has reached US$7.3 billion and disbursed across 102 projects, the bank’s data shows.

In 2018 alone, the Manila-based development bank committed $372.86 million in nonsovereign loans to the private sector in Indonesia to help the country achieve sustainable development targets, such as the reduction of greenhouse gas emissions through renewable investment.

Other than environment-related concerns, one of the credit risks on coal investment is the lower price of renewable energy. For example, solar energy prices have been reduced significantly in the past few years due to the growing scale of its production, especially in China.

Solar energy will be cheaper than coal-generated electricity by 2030 and wind power will be on par with coal by 2050, according to local energy think tank Institute Essential Service Reform (IESR).

“For example, the price of solar photovoltaic [PV] electricity in 2030 will stand at 4.69 US cents per kilowatt-hours [kWh] while for coal it will stand at 5.15 to 5.25 US cents per kWh,” IESR executive director Fabby Tumiwa said recently.

However, Yuichiro noted that renewable energy still needs more time to become the main source of energy in Indonesia as battery technology to address intermittency issues was still being developed.

“In the meantime, the problem could be addressed by integrating renewable energy with gas-fired power plants that could be ramped up quickly,” he said.


Weekly News

ANTAM Receives the CSA Award 2019 in Value Stock Category

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) is pleased to announce that the Company has received the CSA Award 2019 in Value Stock category. The award was initiated by Association of Indonesia Securities Analyst (AAEI) and CSA Research on July 18, 2019.

ANTAM’s Director of Finance, Dimas Wikan Pramudhito said:

“The CSA Award 2019 is an appreciation of the Company’s growth solid and positive performance. Through the Award, ANTAM committed to carry out the Company operations to continues implementation of Good Corporate Governance (GCG) practices, to deliver solid returns to our shareholders and stakeholders.”

The CSA Award 2019 was held as an appreciation event for the 42 Public Company which comprise into 3 (three) categories, namely “Value Stock”, “Stock Income” and “Growth Stock”. The CSA Awards has been running for the third years. The theme of CSA Awards 2019 is “Challenges of Public Company in Facing Industry Changes 4.0″. The Award was held to commemorate the 42 years of reactivation of the Indonesian Capital Market.

The evaluation criteria of CSA Award 2019 was covering of: (1) going concern aspects, (2) future profitability of Public Company aspects (3) stock liquidity aspects, (4) good corporate governance aspects and (5) information disclosure to shareholders aspects.


Weekly News

Indonesian Official Refuses to Be Drawn on Whether Ore Export Ban Might Be Brought Forward

A top Indonesian mining ministry official said on Monday he did not want to speculate on whether the government might bring forward a planned ban on mineral ore exports from 2022.

The ban is aimed at making miners process minerals in Indonesia, a major exporter of nickel ore. There was talk in the metals market on Monday that the ban might be brought forward, sending nickel prices to a four-year high on the Shanghai Futures Exchange and to a two-week high at $14,930 a ton on the London Metal Exchange.

“I don’t want to speculate in that regard,” Bambang Gatot Ariyono, director general of mineral and coal at the mining ministry, said when asked if there were plans to change the legislation to ban exports.

Under a 2017 mining regulation, Indonesia is due to stop allowing the export of unprocessed ore starting Jan. 12, 2022, after giving miners a five-year period to build smelters onshore.

“As long as there is no new regulation, the current one remains in effect,” Ariyono said.

Last month Ariyono said that Indonesian authorities would enforce a ban on the export of raw ore exports by 2022 to make miners process minerals in the country.


Weekly News

ANTAM Receives Indonesia Most Innovative Business Award and Indonesia Corporate PR Award 2019

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) receives two awards, namely the Indonesian Most Innovative Business Award (IMIBA) 2019 and Indonesia Corporate PR Award (IPRA) 2019 from Warta Ekonomi Magazine. The award was received by ANTAM’s General Manager of Precious Metal Processing and Refinery Business Unit, Mr. Muhammad Abi Anwar.

ANTAM’s Director of Commerce, Aprilandi H. Setia said:

“This award is a positive appreciation for the efforts of all ANTAM employees in implementation of Corporate best performance through the implementation of good corporate governance principles. This award is also a appreciation for ANTAM’s innovation especially in the downstream gold commodity sector managed by the Company. “

ANTAM was awarded the IMIBA 2019 as an “Innovative Company in the Development of Precious Metals and Business Products Category Metal and Mineral Mining”. While at the IPRA 2019 award, ANTAM became the “Top 3 Most Popular Mining Company in 2019 in the Mining Category”.

One of ANTAM’s innovation especially in the downstream gold commodity sector is new design and packaging of ANTAM-LM gold when launched in 2018. The recent design has special features such as wider shaped dimension and packed with CertiCard® technology which provides the layered security features to enhance the security sense in gold investment. The recent Company’s innovation on ANTAM-LM gold product is the initiation of the “Gift Series” that originates from the opportunity for the availability of “gift” gold products with packaging attached to greeting cards in the Indonesian market. ANTAM is the only company in Indonesia that manufactures this product and is made to meet customer demand.


Weekly News

METALS-Copper Hits Two-Year Low as U.S.-China Trade War Escalates

Copper prices fell to their lowest in more than two years on Monday, hit by the escalating trade dispute between the United States and China, while nickel prices climbed on concern over supplies from Indonesia.

Benchmark copper on the London Metal Exchange ended 0.8% down at $5,685 a tonne. Prices of the metal used widely as a gauge of economic health earlier hit $5,640 a tonne, its lowest since June 2017.

“Commodities and producers are being used as proxies for macro economic sentiment. Prices do not reflect fundamentals or fair value,” said Bernstein analyst Paul Gait.

“There are question marks over Indonesian (nickel) supplies. It looks like the grace period on the ore ban is coming to an end.”

TRADE: U.S. President Donald Trump last week said the United States would impose more tariffs on Chinese imports, while China vowed to fight back, ending a month-long trade truce between the world’s two biggest economies.

“The 10% tariff on the $300 billion worth of goods, if imposed, could further reduce China’s exports by 2.7% and drag down China’s GDP growth by 50 basis points,” Citi analysts said in a note.

“China’s mid-year politburo meeting emphasised stability and modest stimulus in preparation for a prolonged trade war. But downside risks loom large if said countermeasures are further disruptive, likely leading most commodity prices to our bear case scenario.”

China consumes about half of the world’s supply of industrial metals.

YUAN: China has also allowed the yuan to breach the key 7 per dollar level for the first time in more than a decade, in a sign Beijing might be willing to tolerate more currency weakness that could further inflame the trade conflict.

NICKEL: Prices of the stainless steel ingredient hit a two-week high at $14,970 a tonne on the LME, while on the Shanghai Futures Exchange they touched a four-year high.

The latest trigger is supply risk from Indonesia.

Three-month nickel ended 3% up at $14,880 a tonne.

INDONESIA: Throughout 2017, Indonesia issued permits to export more than 22 million tonnes of nickel ore.

Permits typically stand for one year and companies are allowed to renew them. Under current rules, no unprocessed ore exports will be allowed after January 2022.

“Some people say Indonesia may advance the ore ban from 2022 to this year. I’m not sure how true it is, but some investors will gamble on this to buy nickel,” said one nickel analyst.

PRICES: Aluminium finished down 0.4% at $1,763 a tonne, zinc slid 1.7% to close at $2,311, lead gained 0.1% to $1,954 and tin dropped 0.4% to $16,905.


Weekly News

ANTAM's Committed in Distribution of Earthquake Assistance in North Maluku

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) is committed to channeling the earthquake disaster respond assistance in North Maluku amid the weather challenges around the affected area in South Halmahera Regency, North Maluku. The assistance distribution was transported by land and sea routes.

ANTAM’s President Director, Arie Prabowo Ariotedjo said:

“The Company always coordinated with the North Maluku Provincial Disaster Management Agency on aid distribution. ANTAM’s provide an assistance such as the supplying basic needs, medicines, food ingredients and emergency response actions by sending paramedics and doctors. We hope, the efforts may help to ease the burden of the affected people.”

The earthquake response assistance was brought from Ternate to Saketa Village, West Gane District (main post) by using trucks and then distributed to other villages using a long boat.

ANTAM’s emergency response to the North Maluku disaster was strengthened by 12 personnel consisting of 10 Emergency Response Group (ERG) from North Maluku Nickel Mining Business Unit; Southeast Sulawesi Nickel Mining Business Unit; and West Kalimantan Bauxite Mining Business Unit. The team also consist of paramedic personnel and medical doctor to given medical services especially in Saketa and Ranga-ranga Village, West Gane District, North Maluku.

In this earthquake response emergency action, ANTAM also served as the coordinator for SOE’s CARE assistance in North Maluku. As of July 18, 2019, the National Logistics Agency (Perum BULOG), PT Bank Negara Indonesia (Persero) Tbk (BNI), PT Asuransi Jasa Indonesia (JASINDO), PT Perusahaan Gas Negara (Persero) Tbk (PGN), PT PERTAMINA (Persero), PT Wijaya Karya (Persero) Tbk, Indonesian Credit Guarantee Corporation (JAMKRINDO), PT Perusahaan Listrik Negara (Persero) (PLN), PT Jasa Raharja (Persero), PT Sucofindo (Persero), PT TASPEN (Persero), PT ASDP Indonesia Ferry (Persero), PT Kimia Farma (Persero) Tbk, PT Asuransi Kredit Indonesia (Persero) (ASKRINDO), Naval Base (LANAL) Ternate and Bank BRI (Persero) Tbk.

ANTAM appreciates the synergy of SOE’s that have been established in North Maluku. This shows the commitment of ANTAM and the SOE’s CARE as a part of implementation “the State Owned Enterprise present to the country” value.

As a coordinator, ANTAM seeks to facilitate other SOE’s that want to channel aid in the form of money and goods. On aid distribution activity, ANTAM and local stakeholder are working together in aids distribution in order to send the assistances for the affected people properly.


Weekly News

METALS-Copper Drops to 2-Year Low On Trade War; Nickel at 4-Year High

London copper hit its lowest in more than two years on Monday after a trade war between the United States and China escalated, while Shanghai nickel prices hit a four-year high on renewed concerns of an export ban in Indonesia.

U.S. President Donald Trump last week said the United States would impose more tariffs on Chinese imports, and China on Friday vowed to fight back, ending a month-long trade truce between the world’s two biggest economies.

Three-month copper on the London Metal Exchange tumbled to as low as $5,640 a tonne, its lowest since June 2017. The most-traded copper contract in Shanghai ended down 0.8% at 46,060 yuan ($6,551.83) a tonne.

“It (the trade war) is likely to weaken demand for base metal because China has retaliated today by allowing the Chinese yuan to weaken in line with the fundamentals,” said Jeff Ng, Continuum Economics’ chief economist for Asia.

“Going forward this means there will be more rounds of tariffs and protectionism against each other between the two largest economies, which signals lesser demand for commodities including base metals,” Ng said.

Shanghai’s nickel prices surged to 119,360 yuan a tonne, their highest since May 2015, while London nickel rose as much as 2.5% to $14,805 a tonne, amid renewed worries of an ore export ban from major nickel producer Indonesia.

“Some people said Indonesian may advance the ore ban from 2022 to this year. I’m not sure how true it is, but some investors will gamble on this to buy nickel,” said a nickel analyst.

Indonesia, which is a major source of nickel ore used mainly in the stainless steel industry, had said it would restrict exports of unprocessed ore from 2022.


* YUAN: China on Monday let the yuan tumble beyond the key 7 per dollar level for the first time in more than a decade, in a sign Beijing might be willing to tolerate further currency weakness amid an escalating trade row with the United States.

* PRICES: London aluminium dipped 0.2%, zinc rose 0.5%, while lead eased 0.1% and tin edged down 0.2%. In Shanghai, aluminium advanced 0.5%, zinc increased 0.8%, while lead dropped 0.2%.

* BHP: BHP Group will face a test of its ability to move beyond bulk mining over the coming year with a foray into specialty chemicals for the battery industry at its once struggling Nickel West division.

* HKEX: Hong Kong Exchanges and Clearing is due to start trading in six dollar-denominated London metal mini futures on Monday in aluminium, zinc, copper, nickel, tin and lead.

* For the top stories in metals and other news, click or


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 7.0301 Chinese yuan).


Weekly News

Way Linggo Processing Plant Resumes Operation

Kingsrose Mining (ASX: KRM) (‘Kingsrose’ or ‘The Company’) is pleased to advise that the processing plant at its Way Linggo Gold Project in Indonesia resumed operating at 8am on 4 August 2019.

Processing stopped on 2 July 2019 due to a pit wall failure (see ASX release dated June 28, 2019), which interrupted ore supply.

The resumption of processing is in line with the timeline provided at the time of the wall failure.

While the mill was not operating, the processing team completed maintenance and comprehensive cleaning of the plant and chutes.

Crushing of available stockpiles started in mid-July, meaning the mill will resume operations with a full fine-ore stockpile in place. On 3 August 2019 the team began filling the tanks. This will enable the plant to ramp up to optimum capacity immediately.


Mining People on The Move

Gulf Manganese Corporation – Building A Successful Indonesian Smelting Business

The developer of premium Indonesian Manganese Alloys, Gulf Manganese Corporation Limited (ASX: GMC) has appointed highly experienced Mr. Ian Gregory as Company Secretary, as per the latest update on ASX.

Mr. Ian Gregory is a professionally well-connected Director and Company Secretary with more than 30 years of experience in the provision of company secretarial and business administration services. He has previously served as Chairman of the Western Australian Branch Council of Governance Institute of Australia.

On Education front, he has a Bachelor of Business degree from Curtin University and is a Fellow of the Governance Institute of Australia, the Financial Services Institute of Australia as well as a Member of the Australian Institute of Company Directors.

Earlier, Mr. Robert Ierace was serving as Company Secretary; however, due to increasing finance and governance requirements, the company made a decision to separate the finance and secretarial roles in order to strengthen the company’s professional resource base. Consequently, Mr. Robert Ierace is retiring from the position of Company Secretary to focus on his role as Chief Financial Officer.

Gulf to Acquire Strategic Interest in Iron Fortune Pty Ltd

Gulf Manganese Corporation recently made a strategic step to diversify its asset base beyond Indonesia by entering into an agreement to acquire a strategic 20% interest in Iron Fortune Pty Ltd. This is expected to provide Gulf with a first to market exploration opportunity in Timor-Leste. As per the Gulf, Iron Fortune’s strong local relationships and geological knowledge of the region will help the company in growing manganese footprint outside of Indonesia.

To acquire the 20% interest, the company will have to make an initial payment of A$100k for exclusivity while the due diligence process is completed. Both the companies have agreed for coordination in order to develop a work plan and strategic direction. And once the due diligence process is finalised, the company will pay a further A$200k and issue shares worth A$100k; and Iron Fortune will issue Gulf a 20% stake.

As per the financial terms, Gulf will also commit to spending A$300k on the Business by 31 August 2020, and a further $300k in the following 12 months to earn 35% and then 51% interest in Iron Fortune. Once the 51% interest is earned, Gulf will complete a mining study and reach a decision to mine to earn a further 29% interest for a total of 80%. After which, the current shareholders of Iron Fortune will have the right to fund the mining and development costs on a pro-rata basis. In case, Gulf completes the acquisition to 100% of Iron Fortune, the current shareholders will receive a 2.0% Net Royalty on Profit.

As per terms of the agreement, Hamish Bohannan will be appointed Non-Executive Director of Iron Fortune Board.

The company’s management believes that this partnership can significantly de-risk the Gulf’s ore supply chain and help it in expanding its high-quality manganese mining footprint and processing capabilities. It is believed that this will help in the development of Gulf’s Kupang Smelting Hub facility.

Kupang Smelting Hub Financial

The agreement is subject to various conditions, which include:

  • Gulf undertaking and completing its Due Diligence on Iron Fortune;
  • Gulf Board approval;
  • Gulf receiving the necessary regulatory approval (if required);
  • Confirmation that the Business is in good standing and fully compliant with respect to TimorLeste law and regulations.

Review of Company’s Operations

In the June quarter, the company made substantial operational progress with several key milestones achieved, including the securing of the Company’s Direct Shipping Ore (DSO) licence in May 2019.

In the month of May, the Company’s Indonesian subsidiary, PT Gulf Mangan Grup (GMG) received its Direct Shipping Ore Licence from Indonesia’s Ministry of Trade, allowing GMG to export up to 103,162 tonnes of high-grade manganese ore per year.

During the quarter, key management personnel attended the Vienna’s International Manganese Institute’s (IMnI) annual conference.

Recently, the company vended High-Grade Timorese manganese mine, Putra Indonesia Jaya (PIJ) to its key Indonesian and Singaporean partners and announced its intention to supply the 100% of the ore produced from this mine to Gulf’s operations in Kupang. It is expected that ore supply from the mine will commence in the month of September 2019. By the first quarter of calendar year 2020, the ore supply is expected to increase to around 2,000 tonnes per month.

During the quarter, the company successfully raised A$3.24 million by issuing ~647.20 million shares at $0.005 per share. The company has also agreed to place further 45 million shares at an issue price of $0.007 to Acuity Capital for a total of A$0.32 million in accordance with the Controlled Placement Agreement with Acuity announced on 31 January 2018. As per the company, the funds received from the placements will be used to advance preparations for DSO start-up and for general working capital purposes.

Cash Flow Position

During the June quarter, the company spend $679k of cash on development activities, $485k on staff costs and $624k on administration and corporate costs. The total net cash used in operating activities during the June quarter was around $1.79 million. The net cashflow from investing and financing activities during the quarter was $92k and $5,220k respectively.

The total estimated cash outflows for September quarter is around $1.7 million which includes around $980k to be spent on development, $450k to be spent on staff costs and $280k to be spent on administration and corporate costs.


By ramping up DSO exports over the coming months, the company intends to utilize the generated cash to finalise the commissioning of first two smelting hub furnaces at Kupang, which remain on-track for completion in the first quarter of next year. The company is also advancing discussions with debt funding providers and potential offtake partners to expedite this construction process.

Stock Performance

At the time of market close on 5th August 2019, GMC’s stock was trading at a price of $0.007 with a market capitalisation of circa 34.56 million.


Weekly News

PLN Still Relies On Coal As LNG-Fueled Electricity Remains Expensive

It seems that Indonesia’s objective to lower its reliance on coal as a main energy source to generate power remains high in the sky, given its lower price compared to other energy sources, such as liquefied natural gas (LNG).

The price of electricity generated from LNG is still double the price of coal-powered electricity, said PLN system planning manager Arief Sugiyanto.

“Coal-fired power plants [PLTU] can supply electricity at a price of 6 US cents per kilowatt hour [kWh], but the LNG-electricity price is double that at 12 cents per kWh,” he stated on Thursday.

There were factors of logistic costs that caused the price discrepancy, he added, as LNG transportation from the upstream was pricier compared to coal.

As a result, PLN has steeply reduced its LNG purchase from state energy giant Pertamina to only 11 cargoes from the 17 projected for 2019. Earlier this year, the firm said it would buy just six cargoes of LNG but the Upstream Oil and Gas Regulatory Task Force (SKK Migas) announced last week that PLN will take another five cargoes throughout 2019.

“It [PLN] decided to take it again [five cargoes] as the price is now lower than the initial one,” SKK Migas deputy for finance and monetization Arief Setiawan Handoko said.

Of the remaining six cargoes already produced by Pertamina, two will be taken back by the energy giant and its subsidiary Pertagas, while one was sold to BP Singapore while three cargoes were curtailed.

At the same time, PLN also projected its demand for coal to generate power would jump 12.37 percent next year to 109 million tons. The increase was needed to supply its two new coal-fired power plants (PLTUs) in Java with a capacity of 2 gigawatts (GW), namely Java-7 and Java-8.

The two power plants are set to commence operations in September at the soonest.

When revealing the new electricity procurement plan (RUPTL) to the public in March, Energy and Mineral Resources Minister Ignasius Jonan said coal-fired power plants would still dominate the country’s electricity supply at 54.6 percent.

“The use of coal in our power grid is still high at 54.6 percent from the total 100 to 110 gigawatts in 2025. Meanwhile, the contributions of renewable energy and gas stand at 23 and 22.2 percent respectively,” he said.

Such a plan drew criticism from environmentalists who had warned that it would cause massive pollution.

Even though the price of LNG-powered electricity could not compete with that of coal, Arief gave assurances that PLN would increase its LNG consumption for power generation to compensate for the lower demand for piped gas next year.

PLN’s total gas input will be down 5.6 percent to 486 billion cubic feet (bcf) next year with LNG demand set to increase 22 percent to 221 bcf, he said. Meanwhile, piped gas input will fall 20 percent to 262 bcf due to the low supply from the South Sumatra – West Java Pipeline, among other things.

Global energy think tank Wood Mackenzie previously projected Indonesia’s higher demand for gas to generate its power. Overall, it forecast demand for LNG in Southeast Asia would grow over five times by 2040 to 236 million tons per year.

“Almost half of the demand will come from the two major markets of Indonesia and India,” Wood Mackenzie principal analyst Asti Asra said in an e-mail recently. “Indonesia’s LNG demand is coming from the power sector.”


Weekly News

Shi.E.L.D. Seeks Opportunities in Indonesian Coal Transhipment Market

Logistics services provider Shi.E.L.D. Services is seeing new opportunities in transhipment logistics as it looks to expand in the Southeast Asian region, particularly in Indonesia’s coal transhipment business despite on-the-ground challenges.

In Indonesia, Shi.E.L.D. is currently engaged in several projects including four floating transfer stations owned by ABL Logistics and one floating transfer station owned by Transcoal Pacific. The vessels can handle 50,000 tonnes of coal a day and are all equipped with heavy duty cranes and conveyor systems.

Corrado Cuccurullo, ceo of Shi.E.L.D. and technical director Luca Condini both see the coal transhipment business in Indonesia as steady yet uncertain.

“The future of the coal transhipment business in Indonesia is strictly connected with the future of thermal coal. We have seen the fall of thermal coal price over the past few months which led to production cuts, drop of export and economic challenges in the coal industry including the transhipment sector,” Cuccurullo and Condini jointly said.

They explained that with mine concessions set to expire in the next few years and they will have to be renewed, the Indonesian government might not renew them in order to keep the mines under government control.

“For this reason, power and mining industries are reluctant to invest in long term logistics projects because the government policies for the next years about mine concessions are still unclear,” they said.

In terms of demand, while China has reduced demand for thermal coal, the Indonesian domestic demand has increased as well as the demand from other countries in the region like Vietnam, Malaysia, Pakistan and the Philippines.

This is mainly due to long term plans put in place by these countries to increase their power generation capacity and although the use of renewable resources is increasing, coal remains the most cost-effective fuel source for power generation and is one of the most abundant Indonesia’s natural resources.

“This could also represent a driving factor in the future for the logistics sector as more barging and transhipment services will be required to transport coal to the power plants,” Cuccurullo and Condini said.

They believed that Indonesian logistics companies can overcome those local challenges by providing integrated logistics services including both barging and transhipment so as to optimise management costs and raise efficiency of the coal logistic chain. This would in turn reduce the overall logistics costs and enhance the value of the logistics provider.

The logistics provider can diversify their activity offering transhipment services for other commodities in other parts of the world, such as bauxite in Guinea, coal in Vietnam and Russia, and iron ore in the Middle East.

“In conclusion we see the coal transhipment business in Indonesia as steady and uncertain, with mining and logistics companies waiting for a more clear scenario about the government decisions to be taken in the next months and keeping the attention to the rest of world to extend their activities beyond the domestic borders,” they said.

Established in 2018, Shi.E.L.D. is a spin-off of Coeclerici Logistics with headquarters in Milan and a branch office in Indonesia’s Balikpapan.


Weekly News

Indonesian Physical Coal Prices Steady to Lower

Physical prices of low-calorific value Indonesian coal were flat to slightly softer today following the results of a Chinese utility tender, which was awarded at prices below recent spot deal levels.

Chinese utility Huaneng purchased 690,000t of imported coal to be delivered to its power plants during late August to early October. Of this, around 543,000t was Indonesian coal in a NAR 3,800-5,500 kcal/kg range. This included 178,000t of GAR 4,200 kcal/kg coal in three shipments for delivery from late August to mid-September, which were awarded at prices netting back to $31.80-32/t fob, below the level of recent trades.

In the spot market, a cross-month loading August-September geared Supramax GAR 4,200 kcal/kg cargo was bid at $32.50/t today, in line with yesterday, and offered at $33-33.25/t. A September-loading geared Supramax cargo of the same coal was bid at $31.80/t but no corresponding offers were heard.

Offers for late August-loading geared Supramax cargoes were around $32/t, down from offers of $32.50-33.50/t yesterday for August-loading shipments. Bids were still hard to come by at this level.

By comparison, spot trades involving August- and September-loading geared Supramax cargoes of this coal traded last week at $33-33.15/t, and Argus assessed the fob GAR 4,200 kcal/kg price at $33.13/t most recently on 2 August.

Bid levels will likely fall on the news of the tender results, potentially pulling the market down further, market participants said.

Trading was slow in the ICI 4 derivatives market. August ICI 4 contracts were bid at $32.30/t and offered at $33/t, roughly in line with yesterday but down from the last Argus-assessed price for this month on 31 July at $33.80/t. September contracts were bid and offered at $32.10-32.75/t, around the level of yesterday’s Argus-assessed settlement price of $32.45/t for September.

In the Australian thermal coal market, a few Capesize and Panamax cargoes of NAR 5,500 kcal/kg coal were offered around $50/t fob Newcastle for September-November loading, down from the Argus-assessed price of $50.10/t fob Newcastle last week, but bids were scarce.

China’s domestic coal prices held steady today, with offers of NAR 5,500 kcal/kg coal at around 590 yuan/t ($83.70/t) fob northern China ports, while bids were around Yn585-590/t fob. This compares with Argus’ latest assessment of Yn594.20/t ($85.44/t) fob Qinhuangdao on 2 August.

In China’s futures market, the September contract on the Zhengzhou commodity exchange closed at Yn578.40/t today, up by Yn0.40/t from yesterday.


Weekly News

BlackGold Natural Resources to Seek Third Extension from SGX for AGM

CATALIST-LISTED coal mining company BlackGold Natural Resources will seek a third extension from the Singapore Exchange (SGX) to hold its annual general meeting (AGM) by Sept 30, citing more time was needed for its qualified person’s report.

BlackGold, which had been entangled in an Indonesian power plant graft scandal last year, said: “The company understands the gravity of the situation and is currently in the midst of reviewing the draft 2018 QPR (qualified person’s report) which has already been submitted by the qualified persons.”

This emerged in BlackGold’s response to SGX, which had queried the firm on how it plans to publish its annual report, given that the chief financial officer and majority of the independent directors have left.

BlackGold replied that the executive chairman and chief executive officer of the company, together with the present directors, will oversee the annual report process and the holding of the AGM.


Weekly News

Concerns Loom Over Tata Power's Indonesia Mining Lease, Say Analysts

Tata Power, through its subsidiaries, holds 30 per cent stake in PT Kaltim Prima Coal and a 26 per cent stake in PT Baramulti Suksessarana Tbk mines in Indonesia.

Private power producer Tata Power faces concerns over its mining leases in Indonesia, as licences come for medium-term renewal. The company, however, has assured analysts there would be no material impact on its coal profitability.

“The coal mining contract of a relatively small Indonesian contractor (Tanito Harum, with 2-5 million tonnes per annum production) was revoked earlier this month. This has raised the perceived risk of a similar rejection for other coal producers with mining contracts coming up for renewal in the medium term,” analysts with JPMorgan wrote in a July 25 note on Tata Power.

Tata Power, through its subsidiaries, holds 30 per cent stake in PT Kaltim Prima Coal and a 26 per cent stake in PT Baramulti Suksessarana Tbk mines in Indonesia. The company also signed an agreement to sell its 30 per cent stake in PT Arutmin Indonesia and associated companies in coal trading and infrastructure.

The licence for KPC expires in 2021. In its annual report for 2018-19, Tata Power said, “The renewal is under consideration by Indonesia.”

For the April-June 2019 quarter, Tata Power reported a net profit of Rs 249.94 crore, against Rs 1,768.78 crore in the same quarter a year ago. A 10 per cent decline in coal prices seen in the June quarter also lowered profit contribution from the Indonesian mines to Tata Power for the quarter under review.

While the fate of the Indonesian mining lease is not clear, Tata Power’s management has assured analysts the move will have minimal impact. “On the basis of the draft regulations under consideration, the management doesn’t expect any material impact within a 5 per cent range on its coal business profitability; however, in the interim, it remains a key uncertainty until it is cleared,” analysts with SBI Caps Securities wrote in an August 2 report on the company.

The analysts also added, “The Indonesian government is working on amending the existing regulation with likely changes in tax/royalty/value-added tax adjustments, among others, which is yet to be cleared by the new government that is expected by October this year.”

This is not the first time.

Tata Power will be dealing with changes in regulations in Indonesia. The Indonesian government, in early 2018, introduced a domestic market obligation scheme, which requires a local coal mining company to sell 25 per cent of its production to the domestic market at a fixed price of $70 per million tonne or the market rate, whichever is lower, to protect state-owned power plants against rising coal prices.

“This impacted the sale realisation of the mines, thereby impacting their profitability. The validity of the policy is till December 2019 and the Indonesian government will review the same thereafter,” Tata Power said in its 2019 annual report.

Kameswara Rao, partner, PwC, added, “The viability of competitively bid imported coal-based power plants is delicately balanced, and the profit in coal mining keeps power tariffs low. Any disruption to the supply chain can upset this equation.”


Weekly News

UPDATE 1-Nickel Sizzle: Hot Money Piles into Metal on Indonesia Ore Ban Talk

* LME nickel jumps as much as 12.7%

* ShFE nickel hits record high

* Ore ruling change “uncertain” – senior official (Adds quotes, details)

Nickel prices surged on Thursday on concerns that major supplier Indonesia could bring forward a ban on ore exports despite a senior official claiming any such ruling remains “uncertain.”

Benchmark three-month nickel on the London Metal Exchange (LME) surged as much as 12.7% to $16,690 a tonne, its highest since April 2018. That is the biggest intraday percentage gain for the nickel forward since Jan. 2, 2009.

LME nickel eased to $15,545 a tonne at 0940 GMT, up 5%.

The most active nickel contract on the Shanghai Futures Exchange (ShFE) rose to a record 124,890 yuan ($17,730.49) a tonne.

“This is a very sexy price. For miners, higher price always makes us happy,” said a trader with a nickel mine.

Indonesia, a major supplier of nickel ore used mainly in the stainless steel industry, relaxed a ban on ore exports in 2017, but said at the time the moratorium would last only five years and that exports would be restricted again in 2022.

“I can only talk about the existing (rules). I don’t want to talk about something that is uncertain,” Bambang Gatot Ariyono, director general of mineral and coal at Indonesia’s mining ministry, told Reuters on Thursday when asked if the government is planning to move forward the ban.

Earlier this week, Ariyono said he did not want to speculate on whether the government might bring forward the ban.

Market participants, however, still expected the restriction to come before 2022.

“People believe the ban is coming,” said an executive at a major nickel producer in Indonesia.

LME nickel prices have surged about 50% so far this year, also supported by hopes that electric vehicle (EV) makers will need more nickel for their batteries.

Consecutive years of supply deficit have also underpinned prices.

Underscoring fears that Indonesia may enforce export restrictions is Indonesian President Joko Widodo’s recent move to establish Indonesia as a major EV hub, which has raised speculation he may want to ensure adequate raw material supplies for the industry.

Still, the rally caught many by surprise, as the overall tone of the raw materials markets for EV makers has been subdued of late after China cut subsidies for its own EV makers. The outlook for steel has also softened lately, amid a cooling in China’s property sector and a struggling manufacturing arena.

“People are very confused! They have no idea what happened…(This is) certainly not driven from fundamental,” said a nickel analyst.

Thursday’s trading volume for the most active Shanghai nickel contract was just shy of 2 million lots, more than double the 30-day average of 928,659, ShFE data showed.

“People sell LME and buy ShFE yesterday, but LME jumped up sharply and they are losing money from yesterday’s deals, so today they have to buy LME and sell ShFE to close all contracts,” said another nickel analyst.

As Widodo is not expected to finalise his new cabinet until his second inauguration in October, no ore ban is expected immediately. But miners and traders speculate it will be under discussion as the government’s new agenda is established.

“Nickel has performed remarkably well, and is now at a crossroads, with the outlook dependent on unpredictable Indonesian policy,” said Citigroup analysts in a report on Wednesday.

Citi forecasts nickel could fall by about $2,000 a tonne, or about 13%, if the export ban is not announced in the next one or two months but could rise by that amount if the ban is announced. ($1 = 7.0452 Chinese yuan renminbi)


Weekly News

Chengtun Mining to Spend USD145 Million on Indonesia Nickel Smelter

Chengtun Mining Group plans to lay out USD145 million to partake in the construction of a nickel smelter in Indonesia.

This investment will secure its supply of the resource, which is a key constituent of lithium batteries, the Xiamen, Fujian province-based non-ferrous metal trader announced yesterday.

Chengtun Mining will take an indirect 35.75 percent stake in the project company Youshan Nickel Indonesia via a roundabout capital increase in its shareholder Youshan Nickel, per the announcement.

The project lies within the Weda Bay Industrial Park in Indonesia’s Halmahera province on the island of North Maluku.

Chengtun Mining may later increase its investment in Youshan Nickel in accordance with the project’s future needs, the announcement added.

Youshan Nickel will build the nickel matte smelter project, which will have an annual production capacity of 43,590 tons of nickel matte, which will in turn yield 34,000 tons of nickel, according to the announcement.

Nickel is a core material of ternary power lithium batteries, making up over 40 percent of the cost of such batteries. A semi-product derived from smelting nickel ore to lower its iron content and eliminate impurities, it is the primary raw material in production of various products that containing the element.

Indonesia’s laterite deposits contain more than 10 percent of the world’s nickel reserves, the announcement noted. This investment thus holds great significance in that it will enable Chengtun Mining to break into and develop its operations in this major global nickel-producing region.

Laterite is a type of soil and rock rich in iron and aluminum that commonly forms in tropical regions. Laterites are rust colored because of their high iron oxide content. They form through weathering of underlying bedrock.


Weekly News

RPT-UPDATE 1-Indonesian Nickel Miners Urge Govt Not to Bring Forward 2022 Ore Export Ban

Indonesia’s nickel miners association (APNI) urged the government on Thursday not to bring forward a ban on raw mineral exports from 2022.

The association’s Secretary General Meidy Katrin Lengkey said the group has “indirect” knowledge of a plan to revise the regulation to bring forward the date of enforcement of the ban.

Nickel prices rose almost 5% to a 16-month high on Thursday as fears rippled through the market that major supplier Indonesia could bring forward a ban on exports of nickel ore.

A 2017 mining regulation stated that miners who are currently building smelters are allowed to export unprocessed mineral until January 2022. After that, the government will not allow ore exports.

A mining ministry official Yunus Saefulhak declined to comment.

“Be consistent with the 2022 deadline because people have invested money to build smelters, they have borrowed money with an expectation they can still export until 2022,” Lengkey told reporters. “If it stopped mid-way, many will be stalled.”

Miners rely on their exports revenue to fund their smelter projects, she said.

Lengkey said the ban could be moved forward to this year. She also said the group understands that draft of the revision has been drawn up.

Bambang Gatot Ariyono, director general of mineral and coal at Indonesia’s mining ministry, was asked earlier on Thursday if there was a plan for any change, but told Reuters he did not want to comment on something that is “uncertain.”

Certain existing smelters will benefit if the government moves forward the deadline of the ban, said a nickel mining executive who declined to be named.

“They can control the prices of ores from domestic miners,” the executive said.

Lengkey said domestic smelters are asking for higher grade nickel ores and pay low price for low grade nickel ore, below the government’s benchmark mineral price for nickel.

The miners group, which has 281 members, has requested a meeting with President Joko Widodo to ask the government to regulate the domestic nickel price.

Indonesia currently has 13 operating nickel smelters with input capacity of 24.52 million tonnes. Government data showed that 22 more nickel miners are currently under development with additional capacity of 46.33 million tonnes.

Lengkey said the installed capacity will not be enough to process the country’s ore output.


Weekly News

METALS-London Nickel Eases from 16-Month Peak, But Set for 9% Weekly Gain

London nickel prices eased on Friday, slipping from a 16-month high struck in the previous session, after Indonesia’s nickel miners association said it had urged the government not to bring forward a ban on mineral ore exports.

The association’s Secretary General Meidy Katrin Lengkey said the group had “indirect” knowledge of a plan to revise the date of enforcement of the ban but told Jakarta to “be consistent with the 2022 deadline because people have invested
money to build smelters.”

Nickel is still on course to add 9% in London this week on speculation the ban could be introduced as soon as this year.

Shanghai nickel, meanwhile, struck a record high overnight and closed up more than 5% on Friday.

Supply of stainless steel ingredient nickel pig iron on the Chinese spot market is “still relatively tight and some stainless steel plants have already locked in orders until the end of September,” Huatai Futures said in a note.


* NICKEL: Three-month nickel on the London Metal Exchange fell as much as 1.5%, and was down 0.8% at $15,755 a tonne, as of 0753 GMT. The metal jumped 12.7% to $16,690 a tonne on Thursday, matching an April 2018 high.

* NICKEL: The most-traded October nickel contract on the Shanghai Futures Exchange closed up 5.2% at 126,290 yuan ($17,913.22) a tonne, after hitting a record high of 127,180 yuan overnight.

* OPEN INTEREST: Market open interest in Shanghai nickel, a measure of liquidity, reached 803,652 lots on Thursday, the highest since June 2018.

* COPPER: Benchmark London copper slipped 0.3% to $5,778 a tonne, while Shanghai copper closed 0.7% firmer on 46,680 yuan a tonne.

* COPPER STOCKS: Copper inventories in warehouses monitored by the ShFE rose 0.3% from the previous week to 156,367 tonnes, the exchange said on Friday.

* PERU: Anti-mining protests in Peru have held up about $400 million in copper exports from some of the country’s top mines and blocked supplies from reaching their operations for nearly three weeks, port operator Tisur said.

* ZAMBIA: Glencore’s Mopani copper mines in Zambia has closed two shafts at its Nkana mine, a move that an opposition leader said had led to 1,400 job losses.


* Asian shares inched up on Friday, helped by Wall Street’s rally, but fresh concerns about Sino-U.S. trade ties capped gains in the region.


Three month LME copper 5776.5
Most active ShFE copper 46680
Three month LME aluminium 1779
Most active ShFE aluminium 13905
Three month LME zinc 2282
Most active ShFE zinc 18545
Three month LME lead 2075
Most active ShFE lead 16785
Three month LME nickel 15755
Most active ShFE nickel 126290
Three month LME tin 16910
Most active ShFE tin 135050

($1 = 7.0501 Chinese yuan)


Weekly News

Kingsrose Mining Closes Q4 FY19 With Improved Production And Higher Cash On Hand

Kingsrose Mining Limited (ASX: KRM) is a metals and mining sector company engaged in the exploration and production of gold. The company holds an 85% interest in the Way Linggo Project, located on the mineral rich Trans-Sumatran Fault, part of the Pacific Rim of Fire, Indonesia, through its Indonesian subsidiary PT Natarang Mining (85%-owned), which owns and operates the project.

The company has a 4th generation Contract of Work (CoW) with the Government of Indonesia for ~ 100 km2 of the Way Linggo Project, which encompasses two mines – Talang Santo Mine and Way Linggo Mine, plus a 140 Ktpa Merrill Crowe gold circuit. The Way Linggo Mine has a track record of producing high-grade low-cost gold from open cut activities while Kingsrose Mining is currently exploring the possibility of re-engineering underground operations and commencing open cut activities at Talang Santo.

Recently on 5 August 2019, Kingsrose Mining informed that the processing plant at its Way Linggo Gold Project, that had stopped on 2 July 2019 due to a pit wall failure disrupting the ore supply, resumed operations on 4 August 2019 (8 am), in line with the timeline provided earlier.

While the mill was not operational, the processing team completed the maintenance and comprehensive cleaning of the plant and chutes. Moreover, the crushing of available stockpiles began in mid-July 2019, implying that the mill would have full fine-ore stockpile in place prior to recommencing operations. Subsequently on 3 August 2019, the team began filling the tanks which would allow the plant to immediately ramp up to optimum capacity.

June 2019 Quarter Highlights

Kingsrose Mining reported another successful quarter (three months ended 30 June 2019), that witnessed increased production, lower unit costs and a significant increase in cash on hand.

Operations Overview – The productivity during the drier months of May and June increased considerably to a total of 669k bcm ore and waste moved (March 2019 Quarter (Q3): 526k bcm). The total gold in ore mined stood at 7,871 ounces (Q3: 5,631 ounces) while Kingsrose Mining produced 7,469 gold (Au) ounces and 46,699 silver (Ag) ounces (Q3: 5,471 Au oz and 45,640 Ag oz).

The Way Linggo open pit mined 16,747 ore tonnes at 6.5g/t Au and 78g/t Ag (Q3: 13,839 t at 8.1g/t Au and 102g/t Ag) while the total waste removed from the pit was 310,151 bcm (Q3: 335,810 bcm) during the three months’ period. Meanwhile, the Talang Santo pit produced 12,833 ore tonnes at 10.6g/t Au and 33g/t Ag (Q3: 8,020 t at 7.8g/t Au and 22g/t Ag) with total waste moved from the pit at 346,566 bcm (Q3: 180,855 bcm).

Way Linggo Gold in Ore Mine oz

In addition, the company’s overall strip ratio remained consistent with Q3 and with two pits in production, the processing plant has been operating close to capacity for the quarter. Kingsrose Mining also informed that its consolidated unit costs were reducing as the mill was operating at capacity causing increased efficiencies.

Consolidated Project Volumes bcm

Exploration Update – During the quarter, the company primarily focussed on the near pit drilling activities at Talang Santo and a geologist was employed to complete a comprehensive geochemistry and geophysics validation, compilation and reporting of the significant work undertaken on the regional exploration. This work is ongoing with the output, including prioritisation and assessment of targets, expected in the second quarter of this financial year.

A resource definition and resource extension surface diamond drilling program also commenced in the vicinity of the existing Talang Santo pit, with assays and review of results expected in August 2019 followed by pit re-design to be completed by September 2019.

The next phase of drilling involving deep drilling under the existing underground workings of both Talang Santo and Way Linggo mines was scheduled to begin in July 2019. The program would begin below Talang Santo and go on for around three months, followed by completion of holes at Way Linggo. The drill program results are expected to be disclosed by December 2019.

Processing– The plant throughput for the June quarter was 29,123 dry tonnes (Q3: 22,702 t) at a head grade of 8.4g/t Au and 58g/t Ag (Q3: 7.9g/t Au and 73g/t Ag) while gold recovery was consistent with expectations at 94.9% (Q3: 95.3%). The plant operated at 92.5% of its capacity, reflecting an improvement of 22.5% on the March quarter and above the expectation of 90%.

Corporate and Finance – Around 5,626 ounces of gold (Q3: 5,401 ounces) was sold during the quarter at an average gold price of AUD 1,839, USD 1,299 (Q3: AUD 1,821, USD 1,305) per ounce and realised AUD 10.3 million (Q3: AUD 9.8 million) in revenue. The cash costs (C1) of production reduced to USD 919 per ounce from USD 1,036 in the prior quarter, and all-in sustaining costs of production for the period were USD 1,033 per ounce (Q3: USD 1,190). Overall, there was an improvement in the unit costs resulting from increased ore production and associated efficiencies.

C1 Cash Costs US$ oz Au

As at 30 June 2019, the company had a total of AUD 12.4 million, comprising AUD 4.3 million in cash and AUD 8.1 million in bullion (including unrefined (filter cake, Dore) and refined gold (at AUD 2,009/ounce) and silver (at AUD 22/ounce).

Health and Safety – Kingsrose Mining’s 12-month moving average Lost Time Injury Frequency Rate stood at 1.18 for Q4 FY19 (Q3: 0.62) while the company recorded one Lost Time Injury. Overall, the number of incidents reduced compared to the previous quarters and the site safety programs continued emphasising on the importance of safety assessments prior to starting a job and encourage quality hazard reporting and inspections.

Also, the Community Relations and Empowerment team undertook a number of initiatives for the local community. The areas of work being education, health, employment, economic independence, social and cultural, environmental, creation of Community Groups to support Community Development as well as Infrastructure Support.

Management Restructure– During May 2019, Kingsrose Mining executed a management restructure whereby-

  • Karen O’Neill, Kingsrose’s highly experienced resources & finance executive and CFO, was appointed as Chief Executive Officer.
  • Mr Chloe Lam, Kingsrose’s Financial Controller, was appointed as Chief Financial Officer.
  • Mr John Nguyen, a veteran mining engineer was appointed as Site GM.
  • Mr Stuart Bodey finished his tenure as provisional CEO and would continue a consultant as required.

Stock Performance

On 8 August 2019, Kingsrose Mining closed the day’s trade at AUD 0.051, up 4%, with ~ 1,936,654 shares traded. The company has a market capitalisation of around AUD 35.77 million. Besides, KRM has generated a positive return of 28.95% in the last three.


Weekly News

Ministry of ESDM: AMNT Smelter Will Start Its Operation by 2022

The Ministry of Energy and Mineral Resources (ESDM) is targeting the construction of a smelter owned by PT Amman Mineral Nusa Tenggara (AMNT), which will be completed by 2022 at the latest.

Arcandra Tahar, Deputy Minister of Energy and Mineral Resources, has asked AMNT to submit a smelter construction plan every 6 months for each stage. In an official statement received by, AMNT also claimed to have been trying to complete the construction of the smelter in 5 years, starting from the planning in 2017.

“AMNT through its affiliated company, PT Amman Mineral Industri (PTAMIN) has scheduled a final investment decision,” explained Agung Pribadi, Head of the Communications Bureau of the Ministry of ESDM.

AMNT is targeting its smelter facility to have a capacity of 1 million tonnes per year. This facility will be used to process concentrate from the Batu Hijau mine, the Elang mine, and other sources.


Weekly News

East Asia Signs Agreements With North American Financial Advisor To Help Secure the License of the Miwah Project

East Asia Minerals Corporation. (the “Company” or “EAS”)(TSX-V) is pleased to announce the signing of agreements with a North American Financial Advisor to assist the Company to secure the license of the Miwah Gold Project. The agreements provides support and assistance for identifying, assessing and negotiating of one or more potential transactions involving the further exploration, development and production of the Miwah Gold Project. These arrangements follow several meetings of the Management of the Company, led by Terry Filbert, with Aceh Provincial government officials, our JV partner as well as legal consultants with the objective to secure the license the Miwah Project and move the project forward. The Company has now believes that the Miwah Project license can be secured and then utilize our drilling investment of the area that the Company made in 2010 to upgrade the license to a production status and expand the Company’s operational portfolio.

In addition, the Financial Advisor shall have the right of first refusal to act or participate as agent or underwriter in respect of one or more offerings of securities of the Company that is completed or undertaken during the term of its agreement with syndicate economics in each such Financing of not less than 40%, at Financial Advisor’s option, and with fees payable to Financial Advisor consistent with fees customarily paid to investment banks in North America for similar services.

Terry Filbert, Chairman and CEO commented “We are very excited to be working with this Financial Advisor to provide advice and capital raising services to the Company on the Miwah Project. Their experienced professionals have extensive networks of industry contacts which will aid in moving this project forward.”

The Miwah project is located at the northern tip of Sumatra Island in Aceh Province within the Sumatra Fault Zone. A NI 43-101 Resource Estimate Technical Report on the Miwah Gold Project, dated May 5th, 2011, estimated an inferred mineral resource of 3.14 million ounces. The report is filed on SEDAR at


On behalf of the Board of Directors of East Asia Minerals,

Terry Filbert,

Chairman & CEO


Mining People on The Move

PT Bumi Resources Tbk - Yingbin Ian He

PT Bumi Resources Tbk. (“BUMI” or the “Company”) has convened an Annual General Meeting (“AGM”) or “the Meeting”), Tuesday (18/6) at J.S Luwansa Hotel. The Meeting had satisfied the quorum as it was attended by the shareholders, representing 33,699,426,952 shares or 51,47% of total shares carrying valid voting rights issued by the Company, in accordance with the provision of POJK No. 32 and Article 11 paragraph (1.a) of the Articles of Association of the Company, and the Meeting was therefore declared valid and may adopt resolutions that are valid and binding upon the Company.

The Agenda Items of the AGM were as follow:
1. Approval for Directors Accountability Statement in respect of the Company’s operations for Financial Year ended 31 December 2018.
2. Ratification of Balance Sheet and Profit/Loss Accounts for Financial Year ended 31 December 2018.
3. Utilization of Profit of the Company.
4. Appointment of Public Accountant to conduct the audit of Financial Statements of the Company for Financial Year ended 31 December 2019.
5. Change and/or reconfirmation of composition of Directors and Board of Commissioners of the Company.

By way of voting, the Meeting based on majority votes resolved the following:

First Agenda Item:
1. To approve the Company’s Annual Report, the key points of which have been presented by Directors of the Company and reviewed by Board of Commissioners regarding the conditions and operations of the Company for financial year ended on 31 December 2018.

Second Agenda Item
1. To approve Financial Statements of the Company for financial year ended on 31 December 2018, having been audited by Public Accounting Office Amir Abadi Jusuf, Aryanto Mawar dan Rekan (RSM Indonesia) with an Unqualified Opinion as set out in their report No. 00272/2.1030/AU.1/02/0501-2/1/III/2019 of 28 March 2019.
2. To grant full release and discharge to Directors and Board of Commissioners of the Company for their managerial and supervisory activities for financial year ended 31 December 2018 (acquit et de charge) so long as and to the extent that their actions are reflected in the Annual Report and Financial statements of the Company for financial year ended on 31 December 2018 and are not contradictory to laws and regulations.

Third Agenda Item
1. To declare that for the financial year ended 31 December 2018, the Company is unable to distribute dividends to all of its shareholders.

Fourth Agenda Item
1. To appoint Public Accounting Office Amir Abadi Jusuf, Aryanto, Mawar dan Rekan (RSM) as the auditor who will be auditing financial statements of the Company for financial year ended December 31, 2019 and/or for a given period throughout 2019 (as and when needed at any time), as well as grant the powers and authority to Directors of the Company to determine the amount of honorarium for Public Accountant, as well as other requirements for their appointment upon considering the recommendation of Board of Commissioners of the Company.
2. To grant the authority to the Meeting to delegate the appointment and dismissal of public accountant who will be auditing the financial statements of the Company for financial year 2019, and other periods in financial year 2019, to Board of Commissioners, upon considering their recommendations in accordance with the provisions of Article 36A paragraph (1) of Rule of OJK No. 10/POJK.04/2017 on Amendment to Rule of OJK No.32/POJK.04/2014 on the Planning and Convening of General Meetings of Publicly Listed Companies.

Fifth Agenda Item
1. To approve the resignation of Bapak Haiyong Yu from his position as Director of the Company, as well as grant a full release and discharge (acquit et decharge) from all his managerial and supervisory actions carried out in relation to his function as Director of the Company, which resignation shall take effect as of the closing of the Meeting.

2. To approve the appointment of Bapak Yingbin Ian He as Director of the Company, which appointment shall take effect as of the closing of the Meeting until such time as the office term of the replaced member of Directors expires in accordance with the Articles of Association of the Company, namely at the Annual General Meeting 2022 of the Company, without impairing the rights of the shareholders to dismiss him at any time, according to the prevailing laws and regulations.

3. To approve the reappointment of:
1) Bapak Saptari Hoedaja, as President Director of the Company;
2) Bapak Andrew C. Beckham, as Director of the Company;
3) Bapak Dileep Srivastava, as Independent Director of the Company;
4) Ibu R.A. Sri Dharmayanti, as Director of the Company;
5) Bapak Nalinkant Amratlal Rathod, as President Commissioner of the Company.

which appointment shall take effect as of the closing of the Meeting until such time as the Annual General Meeting 2024 of the Company is held, without impairing the right of the Shareholders to dismiss each of them at any time in accordance with the prevailing laws and regulations.

Accordingly, the composition of Board of Commissioners and Directors of the Company shall be as follows:

Board of Commissioners:
1) Bapak Nalinkant Amratlal Rathod, as President Commissioner of the Company;
2) Bapak Drs. Anton Setianto Soedarsono, as Independent Commissioner of the Company;
3) Bapak Drs. Kanaka Poeradiredja, as Independent Commissioner of the Company;
4) Bapak Y.A Didik Cahyanto, as Independent Commissioner of the Company;
5) Bapak R. Eddie Junianto Subari, as Commissioner of the Company;
6) Bapak Thomas Myer Kearney, as Commissioner of the Company;
7) Bapak Jinping Ma, as Commissioner of the Company; and
8) Bapak Wen Yao, as Commissioner of the Company.

1) Bapak Saptari Hoedaja, as President Director of the Company;
2) Bapak Andrew C. Beckham, as Director of the Company;
3) Bapak Dileep Srivastava, as Independent Director of the Company;
4) R.A. Sri Dharmayanti, as Director of the Company;
5) Linjung Zhang, as Director of the Company;
6) Xuefeng Ruan, as Director of the Company; and
7) Bapak Yingbin Ian He, as Director of the Company.

4. To grant full authority and powers with the right of substitution to Directors of the Company either individually or jointly to perform any necessary acts in relation to the resolutions adopted herein, including but not limited to stating the appointments of the members of Board of Commissioners and Directors of the Company in a notarial deed and registering the same in the Company Register in accordance with the prevailing laws and regulations.

5. To approve the grant of authority to Board f Commissioners of the Company, taking into account the recommendations from the Nomination and Remuneration Committee of the Company, to determine the salary, honorarium and other allowances (if any), as well as distribution of duties and authority of each member of Directors and Board of Commissioners.


Mining People on The Move

Asiamet Resources - Feng (Bruce) Sheng

Asiamet Resources Limited (“Asiamet” or the “Company”) is pleased to announce the appointment of Mr Feng (Bruce) Sheng as a Non-Executive Director to the Board effective from 10 July 2019. Mr Sheng is the Chairman of Melbourne based Asipac Group Pty Ltd, a diversified company with investments across the resources and financial sectors, and various property businesses. Mr Sheng also currently serves as Vice Chairman of the Australia China Business Council (Victoria) and the Executive Chairman of ASX listed Terramin Australia Ltd, a company developing a portfolio of zinc and gold projects in Australia and Algeria.

Tony Manini, Executive Chairman commented:

“On behalf of the Company we welcome Bruce to the Asiamet Board. Bruce has been a long-term supportive shareholder and we look forward to the opportunity to work more closely with him as we move into the project financing and development stage for the BKM project and continue advancing our other high potential projects on the KSK CoW and at Beutong. Bruce has spent the past 25 years working at the interface between China-Australia business and brings extensive experience and networks across China and greater Asia to the Asiamet board. This is particularly relevant given China’s One Belt-One Road policy and the large amount of Chinese inbound investment into Indonesia associated with it. Enhancing the Company’s level of connectivity with China is expected to add significant value as we continue the development of our portfolio of high-quality copper, gold and polymetallic projects. Different skills and experience will be required to take the Company forward and as such further evolution and strengthening of the board and management team is considered an important requisite for continued growth. Our ability to attract new directors of the calibre of Bruce, and Dominic before him, are testament to the progress we have made and the quality of the growth opportunity that Asiamet presents for investors. We look forward to continuing to deliver on our plans for the benefit of all stakeholders.”

The Company provides the following additional disclosure as at 10 July 2019 relating to the appointment of Mr Feng (Bruce) Sheng as director of Asiamet, effective 10 July 2019:

Mr Feng (Bruce) Sheng, aged 56, currently holds or has held the following directorships and partnerships over the last five years.

Mr.Sheng,through the holdings of Asipac Group,has an8.55% interest in the securities of Asiamet at the date of this announcement.

Except as disclosed in this announcement, neither the Company nor Mr. Sheng are aware of any further disclosures that are required in respect of the appointment of Mr. Sheng under Rule 17 or paragraph (g) of Schedule Two of the AIM Rules for Companies.


Tony Manini, Executive Chairman


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About Mitrais

Mitrais is a world class software company with offices in Indonesia, Singapore and Vietnam. Software development and support is our core skill with offices in Jakarta, Bandung, Yogyakarta, and Bali. We also sell and support leading mining & hospital systems. In business since 1991 we have developed or implemented software for over 500 clients including some of Indonesia’s leading companies. Our proprietary competency system guarantees the quality of our staff.

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