Mitrais, Member of CAC Holdings Group

Mitrais Mining Newsletter

November 2019 | Vol. 48


Mitrais Showcases Its Portfolio of Mining Solutions at the 8th International Mining Exhibition to New Markets

November 25, 2019

With decades of experience in the Mining Sector across the Asia-Pacific region, Mitrais is always happy to showcase our product range and extend our expert services to new markets.

“Our Mining Solutions are already in use by many companies throughout Indonesia, and we believe they can be of great benefit to mining companies here”, said She Kun, VP Software Products Services of Mitrais during the 8th International Mining Exhibition in Kolkata, India.

Mitrais is confident that our proven solutions can be a boon for the Mining industry in India as well. A focus of our presentation was on the Spry Scheduler, a modern, fully featured mine scheduling package integrated with a powerful haulage simulation tool. It is suitable for short, medium and long term mine planning; for both open cut and underground operations across all commodities.

Spry has been shown to give engineers the power to produce visual representations of their mine schedules faster than any other scheduler package on the market. She Kun explained why Spry was the key focus “The ability of Spry Scheduler to schedule quickly and visually provides insight and a powerful way to communicate your plan to your teams. This speed helps management make the right strategic decisions. We are delighted to offer this degree of power to our colleagues, particularly in the Indian market”.

Mitrais took the opportunity at the 8th International Mining Exhibition held on 6-9 November 2019 at Kolkata, India, to highlight the extensive portfolio of mining solutions that Mitrais represent. “We were pleased to meet many potential clients in this vertical and establish relationships with them that we are confident will be fruitful for decades to come”, She Kun added.

Source: Mitrais Release

Weekly News

Indonesia's Competition Watchdog Looks Into Nickel Sector After Cartel Complaint

November 18, 2019

Indonesia’s anti-monopoly agency has begun a preliminary study of the country’s nickel smelting sector, an agency official said on Monday, after a miners’ association accused big nickel smelters of conducting a cartel.

The agency will decide whether to launch a full investigation of pricing and other practices in the industry after completing its initial enquiries, Guntur Saragih, a commissioner at Indonesia’s Commission for the Supervision of Business Competition (KPPU), told a news briefing.

The Indonesian nickel miners association (APNI) has claimed that two giant smelters control 60% of the local nickel ore market and determine prices in Indonesia, the world’s biggest nickel ore exporter. It has not named the two smelters.

Last week APNI’s secretary general Meidy Katrin Lengkey told reporters that the anti-monopoly agency had launched an investigation over the complaint, but Saragih said the initial study only began on Monday and would last 30 days and was not a full investigation.

KPPU would also look at government rules on nickel ore pricing, M. Zulfirmansyah, a director at the agency, told the same briefing.

Indonesia’s nickel smelting sector is dominated by foreign companies including Chinese players.

APNI has often argued that local smelters push nickel ore prices down despite a monthly benchmark price set by the government, making the domestic market less attractive than selling overseas.

Indonesia’s mining ministry is revising the rules that govern the domestic price of nickel ore to ensure smelters follow government benchmark prices, a ministry official told Reuters last month.

The ministry aims to finalise the rule changes in January when Indonesia is due to introduce a ban on nickel exports in order to encourage processing of more minerals at home and generate more value from the country’s natural resources.


Weekly News

Subsidiary Awards 2019, Bukit Asam Appreciation for Subsidiary and Indirect Subsidiary Companies

November 19, 2019

PT Bukit Asam Tbk’s satisfactory performance in 2018 with net profit of Rp 5.02 trillion was the highest since Bukit Asam first established, resulted in Bukit Asam the top 5 SOEs that provided the highest dividends to the government.

This result could only be achieved due to contribution of the company’s subsidiaries, indirect subsidiaries and all Bukit Asam affiliates, or Anak, Cucu, dan Afiliasi Perusahaan (ACAP), who has supported the operational performance. To appreciate this, Bukit Asam held Subsidiary Awards 2019, consisting of the Company with the Best Performance in Fiscal Year 2018 and the Best CEO in Fiscal Year 2018.

With these awards, Bukit Asam wished to bring motivation to ACAP management to maintain and improve performance in the next periods. Also, this awarding event was served as a form of appreciation from Bukit Asam for ACAP real contribution.

In Subsidiary Awards 2019, three companies received Company with the Best Performance in 2018 awards, namely PT International Prima Coal as the Best I, PT Pelabuhan Bukit Prima as the Best II, and PT Bukit Asam Medika as the Best III. Meanwhile, President Director of PT International Prima Coal, Iskandar Surya Alam won the Best CEO for Fiscal Year 2018.


Weekly News

Sumitomo Metal Says On Track for FID on Pomalaa Nickel Project by End-March

November 18, 2019

* Japanese miner and smelter Sumitomo Metal Mining (SMM) is on track to finish a definitive feasibility study and make a final investment decision on the Pomalaa nickel project in Indonesia by the end of March, a senior executive said on Monday.

* If the decision is made by SMM, Japan’s biggest nickel smelter, and its local partner PT Vale Indonesia to go ahead, the plant with a capacity of about 40,000 tonnes of mixed sulphide nickel is expected to start production in mid-2020s, Nobuhiro Matsumoto, SMM’s executive officer, told an analyst meeting.

* The Sierra Gorda copper mine in Chile, owned by Polish miner KGHM, SMM and Sumitomo Corp, is planned to produce 108,000 tonnes of copper this year, above its May forecast of 104,000 tonnes and the 97,000 tonnes produced in 2018, Hiroshi Asahi, SMM’s managing executive officer, said.

* Chile’s Quebrada Blanca 2 copper project, in which SMM bought 25% stake this year, is progressing as planned, while the Cote gold project in Canada, in which SMM holds a 27.75% stake, may be delayed from the current plan to start production in 2021, Asahi said.

* SMM, which supplies the nickel-cobalt-aluminium (NCA) cathode materials used in Panasonic Corp’s lithium-ion battery that powers Tesla Inc’s Model 3 and Model X cars, is in talks with automakers and battery makers to supply nickel-manganese-cobalt (NMC) cathode materials, Isao Abe, SMM’s executive officer, said.

* SMM aims to boost output of NMC to account for about 40% of its targeted monthly output capacity of 10,000 tonnes of cathode materials by March 2028, while NCA will make up the remaining 60%, Abe said.

* The trend to make cathode with higher nickel content and less cobalt will likely continue despite falling cobalt prices, Abe said, as automakers continue to seek larger battery capacity and due to political and social concerns over cobalt supplies, including the use of child labour.


Weekly News

Indonesia Believes Its Bauxite Downstream to Reach US$13 Billion by 2020

November 18, 2019

Indonesia, with the sixth-largest bauxite reserves in the world, reportedly believes that its bauxite downstream can reach US$13 billion next year from the current US$9 billion.

Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan pointed out that the country, despite having the sixth-largest bauxite reserves in the world, only exports the ore.

President Joko Widodo said he recently directed to enhance processing to increase the value of the processing industry. He added if bauxite was processed into various derivatives, the value could go up to 11 digits, and this potential had not been maximised yet.

The Indonesian government will consider accelerating an export ban on bauxite and other mineral items such as tin and alumina, among others, depending on the scale of investment, Widodo revealed, while adding that under the current rules, exports of bauxite are allowed till January 11, 2022.

President has encouraged the development of the bauxite processing industry to be accelerated, including PT Indonesia Asahan Aluminum in collaboration with PT Aneka Tambang Tbk via its subsidiary PT Borneo Alumina Indonesia (PT BAI0 to build a bauxite-to-alumina plant in Mepawah.


Weekly News

INALUM Holds Badminton and Table Tennis Tournaments in The MIND ID 2nd Anniversary Series

November 18, 2019

PT Indonesia Asahan Aluminium (Persero) or INALUM hosted a badminton and table tennis tournament held at the Sports Hall (GOR) INALUM Tanjung Gading Housing Complex, Batu Bara Regency, North Sumatra on 16-17 November 2019. The tournament, which was participated by 85 participants from INALUM, ANTAM, Bukit Asam and Timah, was part of the commemoration of the 2nd Anniversary of Mining Industry Indonesia (MIND ID) which falls on 27 November 2019.

INALUM Managing Director Oggy Achmad Kosasih in his remarks explained the purpose of this activity. “This series of sports tournaments is held in order to increase togetherness and cohesiveness among members of the Mining Industry Holding, we say good luck competing and always maintain sportsmanship,” Oggy said.

Furthermore, Director of Bukit Asam Business Development Fuad Iskandar Zulkarnain Fachroeddin on the same occasion congratulated the participants on the event. “It doesn’t feel like MIND ID has been established for 2 years and this tournament is held in order to increase togetherness. To the participants, we wish you a good competition, happy sports and happy! “Fuad said.

This badminton and table tennis tournament is held for 2 days on 16-17 November 2019 which is divided into 6 (six) Directorates starting from the preliminary round to the final round. This tournament is part of the MIND ID 2nd Anniversary commemorative series which started from the basketball tournament on November 10-11, 2019, continued with badminton, table tennis and futsal tournaments on November 16-17, 2019, tennis tournaments and fun bikes on the 23rd November 24, 2019, charity event on November 27, 2019 and the highlight of the event was Explorathon on November 30, 2019.

Also present at the badminton and table tennis tournament was INALUM Managing Director Oggy Achmad Kosasih, INALUM HR Executive Director Ismadi YS Jenal, Bukit Asam Business Development Director Fuad Iskandar Zulkarnain Fachroeddin, Antam HR Director Luki Setiawan Suardi and other INALUM management.


Weekly News

Antam Receives The Best Overall In Annual Report Award (Ara) 2018

November 19, 2019

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) is pleased to announce that the Company has received the Best Overall at the Annual Report Award (ARA) 2018. In 17th ARA, in addition to receives the Best Overall, ANTAM also ranked first in the Non-Finance Private Listed category. The award was received by ANTAM’s President Director, Mr. Arie Prabowo Ariotedjo in Dhanapala Building, the Ministry of Finance of the Republic of Indonesia, Jakarta on November 14, 2019.

ANTAM’s President Director, Arie Prabowo Ariotedjo, said:

“The award reflects the positive reception of our efforts in achieving excellent performance in 2018 coupled with solid implementation of Good Corporate Governance (GCG) practices. We have a solid commitment to conducting GCG principles through transparent business activity and consistent implementation of GCG practices as to deliver solid returns to our shareholders and stakeholders.”

The ARA assessment is conducted on the information disclosure of the Annual Report in accordance with the regulations and guidelines and presented in a relevant and reasonable consideration. 236 companies joined the competition with 11 categories at the award. The Annual Report Award 2018 was a collaborative effort between the Financial Services Authority, the Ministry of State Owned Enterprises, the Directorate General of Taxation-the Ministry of Finance, the Indonesia Stock Exchange, the National Committee of Good Corporate Governance, and the Indonesian Accountant Association. During previous ARA events, ANTAM received similar awards in 2001, 2004, 2007, 2008, 2011, 2012, 2013, 2014 and 2016 and also received the Best Overall predicate in 2014 and 2016.


Weekly News

China Inks Import Contracts with Indonesia Worth Rp35.1 Trillion

November 19, 2019

Several Chinese businessmen signed contracts of imports valued at Rp35.1 trillion, or US$2.5 billion, with their Indonesian counterparts.

“The deals were struck during the Indonesia-China Business Forum and China Coal Import Summit,” Indonesian Ambassador to China Djauhari Oratmangun stated in Beijing on Tuesday.

Coal imports dominated the contracts inked on the sidelines of the second China International Import Expo (CIIE) in Shanghai.

Furthermore, the contracts encompassed the imports of other products, including electronics, agriculture, food, beverages, plastic pellets, and mining products, the ambassador noted at the Indonesian Pavilion of the CIIE officially opened on November 5, 2019.

“Swallow nest products, recycled plastic pellets, oleochemical, coal, and food products are among Indonesian products liked most and well sold in Chinese markets,” the former Indonesian ambassador to Russia remarked.

The 34th Trade Expo Indonesia (TEI) organized in Serpong, Banten Province, on October 16-20, 2019, drew 312 Chinese businessmen.

At least 16 trade and investment deals worth $2.68 billion, or Rp37.7 trillion, were signed during the 2019 TEI between Indonesian and Chinese companies.

The 2019 TEI organizing committee bestowed awards on the Indonesian Trade Attaché in Beijing and the Indonesian Trade Promotion Center (ITPC) in Shanghai for their success in contributing to transaction deals reaching $221 million, or some Rp3.1 trillion.

“Incessant, tireless, and hard work coupled with prayers, cooperation, and synergy among every stakeholder are the main factors in every step that we have been taking in China,” Oratmangun added.


Weekly News

Indonesia President: Domestic Processing of Resources to Resolve Deficit Problem

November 20, 2019

Indonesian president Joko Widodo said on Wednesday the govnerment’s policy of processing natural resources at home will end the country’s current account deficit problem within three years.

Indonesia has had persistent current account deficit since late-2011. Last year’s current account deficit was equal to 3pc of gross domestic product.

“I’ve calculated that if all (natural resources) move toward downstream industry, making intermediate products or end products, the current account deficit can be solved within three years,” Widodo told a mining industry event.

He mentioned Indonesia’s plan to expand the nickel processing industry and urged miners to process more minerals at home, such as bauxite and coal.


Weekly News

Kingsrose Receives Positive Assays from Talang Santo Drilling

November 20, 2019

  • Kingsrose Mining has received final assay results from its phase 1 drilling program at Talang Santo
  • This phase of drilling aimed to infill and test the extension of gold based on intersections from previous drilling
  • Significant gold mineralisation was found in all holes drilled which has encouraged the company to consider future underground mining
  • Kingsrose is now planning the second phase of drilling to target the high-grade zones
  • The company is down 5.88 per cent, with shares trading for 3.2 cents each

Kingsrose Mining has announced the first phase of deep drilling at Talang Santo has been completed and resulted in positive final assays.

The Phase 1 deep drilling program comprised of 21 drill holes for a total of 7318.2 metres. It was designed to infill and test grade continuity between widely spaced intersections from the 2012 and 2013 drilling campaigns.

These drilling campaigns highlighted the potential for extended high-grade gold mineralisation below the underground mine of Talang Santo.

Talang Santo is an open pit mine located 98 kilometres northwest from Bandar Lampung in Indonesia.

Results of the first 10 holes were reported on November 11 2019.

Encouraging results from the final 11 holes include 4.20 metres at 19.8 grams per tonne of gold from 263.4 metres, 6.30 metres at 16.8 grams per tonne from 308.8 metres, 2.90 metres at 7.77 grams per tonne of gold from 333.1 metres, and 2.95 metres at 6.06 grams per tonne of gold from 336.75 metres.

“The results of this programme are very encouraging and highlight the potential for a return to underground mining at Talang Santo,” CEO Karen O’Neill said.

The outcome of this (and other) drilling programs will allow Kingsrose to determine the potential for future underground mining at the project.

Kingsrose is planning the second phase of deep drilling to extend the known depth and strike extents of these high-grade zones.

Additionally, the company will test other areas along the Main Talang Santo Vein where high-grade intersections from earlier drilling were never followed up.

“With all the assays in, we will move to the next stage in determining the economic and technical merits of further drilling and underground development at Talang Santo,” Karen added.

Kingsrose is down 5.88 per cent, with shares trading for 3.2 cents each at 2:46 pm AEDT.


Weekly News

Bukit Asam Received Indonesian Mining Awards 2019

November 21, 2019

PT Bukit Asam Tbk received Indonesian Mining Awards 2019 in the category of Company with the Best Community Empowerment Implementer. This event was organized by the Indonesia Mining Association on November 20, 2019 in Jakarta.

This award was received by the Director of Operations and Production of PT Bukit Asam Tbk, Suryo Eko Hadianto.

Besides the above-mentioned award, PT Bukit Asam Tbk also received 2nd rank of Coal Company with the Best PNBP Payer, 3rd rank of Coal Company with the Best Environmental Management, and 2nd rank of the Largest Domestic Coal Company Expenditure.

These achievements would hopefully motivate all employees to continue their excellent performance as to make PT Bukit Asam Tbk the leader in the Mining Industry sector.


Weekly News

Cokal Secures Contractor for Indonesian Coal Mine

November 21, 2019

  • Coal producer Cokal has secured a contractor for work at its coal mine in Indonesia
  • Project works will include road and jetty construction and mining infrastructure
  • Cokal owns 60 per cent of the project which has an estimated resource of 264 million tonnes
  • After plenty of movement throughout the day, Cokal’s share price is currently down just over two per cent and trading for 4.6 cents each

Coal producer Cokal has found a contractor to build mining infrastructure at its coal project in Indonesia.

The company operates the Bumi Barito Mineral Project which it holds a 60 per cent interest in, with the rest held by Indonesia owners.

A total resource estimate of the project forecasts it told hold 264 million tonnes.

The contractor Cokal has signed with is a subsidiary of the Chinese state-owned China Rail Construction Corporation (CRCC). CRCC is listed on the Shanghai Stock Exchange and is trading for 9.20 Chinese yuan.

Contracted work will include road and jetty construction and overburden stripping and coal mining.

Chairman of Cokal Domenic Martino explained the company believes the contracting approach will support its growth targets.

“The Board believes this approach to appoint contractors to fund, construct and operate the BBM metallurgical coal mine will provide a more reliable outcome and a higher assurance of a successful start-up,” Domenic said.

Additionally, it will support the “ongoing expansion to reach our target production of 2 million tonnes per annum in a reasonable timeframe,” he added.

Road construction will provide pathways from the mine pits to the jetty for transport, while jetty upgrades will improve the sites for wet weather seasons.

Cokal’s share price has recorded a lot movement on the market today. In early trade it fell by 8.5 per cent. However, just before 2:00 pm AEDT it climbed back to its last closing price – but it didn’t hold, slipping back down just over two per cent as market close approaches.

Shares in the coal producer are currently trading for 4.6 cents each.


Weekly News

Bukit Asam Received Annual Report Award 2018

November 21, 2019

Bukit Asam received Annual Report Award 2018 in the Non-Financial Private Listed category. The award was presented by the OJK Capital Market Chief Executive Hoesen and received by the Finance Director of Bukit Asam Mega Satria at Dhanapala Ministry of Finance, Jakarta, Thursday (14/11).


Weekly News

Vale Indonesia: Indonesian Nickel In Matte Producer Is A Beneficiary Of Ban On Nickel Ore Exports

November 21, 2019


  • Vale Indonesia is a beneficiary of Indonesia’s ban on export of nickel ore starting from 2020, as it derives all of its revenue from processed nickel or nickel in matte.
  • The overhang on Vale Indonesia regarding compliance with foreign ownership restrictions is removed, with the state miner signing an initial agreement to acquire a 20% stake in the company.
  • Vale Indonesia trades at 8.3 times consensus forward next twelve months EV/EBITDA, which represents a discount to its historical five-year average EV/EBITDA of approximately 10 times.

Elevator Pitch

There have been two key positive developments for Indonesia-listed nickel producer PT Vale Indonesia Tbk (OTCPK:PTNDF) (OTCPK:PTNDY) [INCO:IJ] in recent months. One is that Indonesia is implementing a ban on nickel ore exports with effect from January 1, 2020, which should provide support for nickel’s price. Another key development is that the overhang on Vale Indonesia regarding compliance with foreign ownership restrictions has been removed. In the medium to long term, demand for nickel is expected to be strong, driven by both stainless steel production and lithium-ion batteries for electric vehicles.

Vale Indonesia trades at 8.3 times consensus forward next twelve months EV/EBITDA, which represents a discount to its historical five-year average EV/EBITDA of approximately 10 times. Vale Indonesia is also valued by the market at a slight discount to its Indonesian peer PT Aneka Tambang TBK (OTC:PAEKF) (OTCPK:PAEKY) [ANTM:IJ], which trades at 8.6 times consensus forward next twelve months EV/EBITDA.

I assign a “Bullish” rating to Vale Indonesia, as Vale Indonesia trades at a discount to historical average and its peer on a forward EV/EBITDA basis, and the company has plans to gradually increase production capacity to meet growing nickel demand.

Company Description

Started in 1968, Vale Indonesia is one of Indonesia’s largest nickel producers engaged in the mining of nickel ore, and the production & sale of nickel in matte. As a subsidiary of Vale S.A. (VALE) (OTC:VALEF), the company is the sole producer of nickel in matte in Indonesia, which is an intermediate product used in producing refined nickel with an average content of 78% nickel, 1-2% cobalt and 20-21% sulfur. Most of Vale Indonesia’s peers mainly produce ferronickel which has a lower nickel content than nickel in matte. Vale Indonesia accounted for approximately a fifth of Indonesia’s total nickel production volumes in 2018. The company has nickel in matte production and processing facilities in Sorowako, East Luwu Regency, South Sulawesi with an annual production capacity of approximately 80,000 metric tons.

Vale Indonesia produced 74,806 metric tons and 50,531 metric tons of nickel in matte in FY2018 and 9M2019 respectively. Its FY2019 full-year production target is 71,000 metric tons of nickel in matte. Vale Indonesia sells its nickel in matte via long-term contracts with its shareholders, Vale Canada Limited and Sumitomo Metal Mining Co. Ltd., which have equity interests of 58.73% and 20.09% in the company as of end-2018. The company sells its nickel in matte in U.S. dollars (its functional currency), and the price is determined with reference to the nickel price on the London Metal Exchange or LME.

There are three distinguishing characteristics of Vale Indonesia as a nickel producer.

Firstly, Vale Indonesia has abundant nickel ore reserves. Vale Indonesia had total nickel reserves of 116.5 million ton dry kiln product or DKP as of end-2018, comprising 14.7 million ton of probable reserves and 101.8 million ton of proven reserves. Its proven nickel ore reserves account for approximately 14% of Indonesia’s total proven nickel ore reserves estimated at 698 million ton. The company has a total nickel mine concession area of 118,017 hectares in Sorowako in South Sulawesi, Bahodopi in Central Sulawesi, and Pomalaa and Suasua in Southeast Sulawesi.

Secondly, Vale Indonesia’s mineral refining plant or smelter facility with a daily production capacity of 240 tons of nickel in matte is equipped with four electric furnaces. The company utilizes electric furnace technology, rather than blast furnace technology. The former is considered as more environmentally friendly, as it produces less carbon emissions.

Thirdly, Vale Indonesia relies on diversified energy sources. Approximately 94% of Vale Indonesia’s energy consumption came from renewable energy in 2018. For non-renewable energy sources, Vale Indonesia uses a mix of high sulfur fuel oil or HSFO, high-speed diesel and coal.

Ban On Nickel Ore Exports

In end-August 2019, it was reported that Indonesia’s Energy and Mineral Resources Ministry announced a ban on nickel ore exports with effect from January 1, 2020. The aim of the ban is to develop the domestic nickel processing industry and increase Indonesia’s exports of higher-value processed nickel products to boost the economy.

LME Three-Month Nickel Price Chart For The Period Between January 1, 2018 and November 20, 2019


The LME three-month nickel price increased from around $12,000 in June-July 2019 to a high of $18,620 on September 2, 2019 following the announcement of Indonesia’s ban on nickel ore exports. Indonesia, the largest producer of nickel ore in the world, is estimated to have contributed more than a quarter of global nickel ore supply in 2018. Indonesia also accounts for 40% of China’s nickel ore imports; China is the world’s largest consumer of nickel ore.

After the announcement of Indonesia’s ban on nickel ore exports, industry experts issued their own predictions of the nickel market in September. Antaike, China Nonferrous Metals Industry Association’s research arm, expected the global nickel market supply deficit to increase from 40,000 tons to over 100,000 tons with Indonesia’s ban coming into effect in 2020. Goldman Sachs issued a research report, predicting that the LME three-month nickel price will increase to $20,000 in three months’ time. On November 13, 2019, Indonesian nickel mining and smelting companies expressed their support for the government’s ban on nickel ore exports in a media briefing.

Vale Indonesia is a beneficiary of Indonesia’s ban on export of nickel ore, as it derives all of its revenue from processed nickel. In other words, Vale Indonesia’s sales of nickel in matte are not affected by the ban on nickel ore exports. Moreover, Vale Indonesia’s revenue should increase in tandem with nickel prices, as the selling price for its products, as part of long-term sales contracts with shareholders, Vale Canada Limited and Sumitomo Metal Mining Co. Ltd., is determined with reference to the nickel price on the London Metal Exchange or LME.

On the flip side, the LME three-month nickel price has corrected significantly from its peak of $18,620 on September 2, 2019 to close to $14,000 in recent days. There are three factors which could possibly partially offset the impact of Indonesia’s ban on nickel ore exports on nickel price.

Firstly, Stainless steel mills and nickel pig iron producers in China have already stocked up on nickel ores, as reported by Argus Media. This is supported by the fact that China’s nickel ore imports grew by +24% YoY in September 2019. This implies that the supply-demand imbalance is not as bad as expected in the near term.

Secondly, Indonesia could increase its production and supply of nickel pig iron over time. Indonesia has traditionally exported nickel ore, which is processed into nickel pig iron, an intermediate product stainless steel mills that purchase. Chinese trading firm Grand Flow Resources estimates that Indonesia’s production of nickel pig iron could increase from 261,000 tons in 2018 to 531,000 tons in 2020.

Lastly, nickel price is also a function of demand. With ongoing U.S.-China trade tensions and a slowdown in global economic growth, there could be a larger-than-expected decline in nickel demand.

It is difficult, if not impossible, to predict commodity price movements, especially in the short run. But Indonesia’s ban on nickel ore exports should be positive for nickel price and Vale Indonesia on a net-net basis.

Overhang Regarding Compliance With Foreign Ownership Restrictions Removed

In mid-October 2019, Mining Industry Indonesia, the state miner formerly known as PT Inalum, signed an initial agreement to acquire a 20% stake in Vale Indonesia.

This removes the overhang on Vale Indonesia regarding the company’s compliance with foreign ownership restrictions for Indonesian mining companies. Foreign companies, Vale Canada Limited and Sumitomo Metal Mining Co. Ltd. are Vale Indonesia’s largest shareholders with equity stakes of 58.73% and 20.09% in the company as of end-2018. Based on a 2014 amendment to Vale Indonesia’s contracts of work or CoW (contractually-based concessions), the company was required to divest 20% of its shares.

Earlier, there were concerns that any delays in Vale Indonesia’s divestment of shares could lead to a suspension of the company’s concession rights, in the worst case. At Vale S.A.’s 3Q2019 earnings call on October 25, 2019, the company referred to the divestment agreement signed with state miner, Mining Industry Indonesia, as an “important step to renew our concession rights there.”

At this moment, the divestment value and the deal structure are unknown. The price at which Vale Indonesia’s shares are transacted, be it higher or lower than the current market price, could affect the company’s share price movements in the near term. When questioned by the media on the transaction price, Rendi Witular, a spokesman for Mining Industry Indonesia, would only say that it would be “fair market value.”

Another uncertainty relates to whether Mining Industry Indonesia will buy existing shares directly from Vale Canada Limited and Sumitomo Metal Mining, or acquire a mix of old and new shares via a rights issue to minimize the dilution of existing minority shareholders’ interests. If the latter option is chosen, it could further strengthen Vale Indonesia’s balance sheet. As of end-3Q2019, Vale Indonesia is debt-free with $201 million of cash on its books.

Medium And Long-Term Growth Drivers

Vale Indonesia has plans in place to increase its current annual nickel in matte production capacity of its existing facilities from 80,000 tons to 90,000 tons by 2022. This will involve replacing old factory equipment and overhauling existing production process, which are the primary causes of current production bottlenecks, so that Vale Indonesia can meet its 90,000 tons production target.

The company also plans to build two new smelters in Bahodopi, Morowali Regency, Central Sulawesi and in Pomalaa, Kolaka Regency, Southeast Sulawesi, respectively. In Bahodopi, Vale Indonesia aims to construct a ferronickel plant to process saprolite nickel ore, which is the main raw material for stainless steel. For the Pomalaa project, a facility with an HPAL (high pressure acid leaching) processing system to process limonite nickel ore is being planned; limonite nickel ore is used mainly for electric vehicle batteries. The Bahodopi and Pomalaa projects are expected to cost $1.6 billion and $2.5 billion respectively, and commence construction in 2020.

Future long-term demand for nickel is expected to be driven by both stainless steel production, and non-stainless applications, specifically relating to lithium-ion batteries for electric vehicles. Stainless steel currently accounts for two-thirds of nickel demand, and Wood Mackenzie expects stainless melt production to increase by around 16% by 2025. Wood Mackenzie also predicts that nickel demand from electric vehicles will grow from 128,000 tons in 2019 to 265,000 tons by 2025.

Given that it takes eight to 10 years for new nickel mines to progress from early-stage exploration to production, it is difficult to ramp up new nickel supply in the near term to correct the current supply-demand imbalance in the global nickel market. Leading nickel producers are expected to be key beneficiaries of growing nickel demand in the medium to long term. Vale Indonesia accounted for approximately 20% of Indonesia’s 2018 total nickel production volumes.


Vale Indonesia trades at 16.4 times trailing twelve months EV/EBITDA and 8.3 times consensus forward next twelve months EV/EBITDA based on its share price of IDR3,230 as of November 20, 2019. The stock’s forward EV/EBITDA represents a discount to its historical five-year average EV/EBITDA of approximately 10 times.

On a forward EV/EBITDA basis, Vale Indonesia is also valued by the market at a slight discount to its Indonesian peer PT Aneka Tambang TBK, which trades at 11.8 times trailing twelve months EV/EBITDA and 8.6 times consensus forward next twelve months EV/EBITDA.

Vale Indonesia offers consensus forward FY2019 and FY2020 dividend yields of 0.2% and 1.4% respectively.

Variant View

The key risk factors for Vale Indonesia are nickel price volatility, a spike in fuel costs, unexpected disruptions to the company’s mining and production activities, and adverse changes in government policies relating to the mining sector.


Weekly News

Bukit Asam Received Award from Muara Enim Regency Government

November 21, 2019

PT Bukit Asam Tbk received an award from the Government of Muara Enim Regency for the company’s contribution to the Regional Original Revenue (PAD). PT Bukit Asam Tbk is considered by Muara Enim District Government to have compliance with contributions to the PAD and Self-Generated Street Lighting Tax in 2019.

The award was given after the Muara Enim Anniversary Commemoration Ceremony at Merdeka Muara Enim Square, and was handed over by the Muara Enim District Court Chief, Mr. Akhmad Nakhrowi Mukhlis, and received by the Tanjung Enim Mining Unit GM, Mr. Suhedi (20/11).


Weekly News

BUMI Group (KPC & Arutmin), Ranked Highest in Indonesia for PNBP (Non-Tax Revenue) in 2018 – Rp 8.4 Trillion

November 21, 2019

PT BUMI Resources Tbk (“BUMI”) through its subsidiaries PT Kaltim Prima Coal (“KPC”) and PT Arutmin Indonesia (“Arutmin”) proudly received an award at the Indonesian Mining Association (IMA) Awards 2019 as the Largest Payer of PNBP (Non-Tax Revenue) 2018 worth a total of Rp8.4 trillion.

The 2019 IMA Awards Appreciation Night was held at the Ritz-Carlton Hotel Ballroom, Jakarta on November 20, 2019 as a form of support for the best commitments and performance of Indonesian Mining Companies who belong to the IMA (Indonesian Mining Association). The event was attended by the President of the Republic of Indonesia, Joko Widodo, the Minister of Energy and Mineral Resources of the Republic of Indonesia, Arifin Tasrif, the Secretary to the “Indonesia Maju” Cabinet, Pramono Anung, along with the officials from the Ministry of Energy and Mineral Resources, the Cabinet Secretariat, and also the representatives of mining companies belonging the IMA.

On this occasion, President Joko Widodo received the highest award in the mining sector from IMA which was conferred directly by IMA chairman, Ido Hutabarat. President Joko Widodo won the award because he was considered to have supported the domestic mining industry.

In his remarks, President Jokowi invited entrepreneurs who belong to IMA to focus on downstream mining business to generate greater value from the commodity. This surely will bring added value and good multiplier effects to the country. In addition to increasing exports, downstream industry can increase employment opportunities and reduce the current account deficit.

IMA Chairman Ido Hutabarat said in his welcome speech, “President Joko Widodo has created a good investment climate in the mining sector by providing legal certainty for the mining industry operations in Indonesia. It is an honor for IMA to give the highest award in mining to President Joko Widodo. We are optimistic that the mining results can be used for the greatest prosperity of the people in line with the values in Article 33 of the 1945 Constitution, said Ido.”

Apart from President Joko Widodo, IMA presented awards to mining companies in Indonesia for 12 categories, viz the Best Payers of Non-Tax Revenue (PNBP), the Largest Payers of PNBP, the Best Environmental Management, the Best Mining Safety Management, the Best Investment Realization based on the Work Plan and Budget (RKAB), Companies with the Highest Domestic Spending, the Best Companies that Use Domestic Products, Mining Service Companies that carry out the Best Mining Principles, Companies with the Best Implementation of Community Empowerment, the Best Application of Associated Mineral Conversion, Mining Companies that Carry out the Best Integrated Downstream, and Companies that Supply DMO Coal with the Highest Percentage.

The prestigious award as Indonesia’s Mining Company with the Largest Payment of PNBP in 2018 was directly conferred by the Indonesian Minister of Energy and Mineral Resources, Arifin Tasrif, to the President Director of PT Kaltim Prima Coal, concurrently the President Director of PT BUMI Resources Tbk, Saptari Hoedaja. Overall, the contribution of BUMI Group through KPC & Arutmin as the Largest Payer of PNBP in Indonesia in 2018 reached Rp8.4 Trillions – more than 2 to 3 times greater than the other companies which were also ranked at the 2019 IMA Awards.

President Director of Bumi Resources Tbk. and KPC, Saptari Hoedaja expressed happiness and pleasure at the awards conferred at the 2019 IMA awards, “This award is proof that BUMI and its business units are continuously committed to complying with laws and regulations in Indonesia. BUMI is the largest contributor to the National Exchequer – the highest in Indonesia in terms of royalties, as well as foreign exchange earnings from exports, and we have been listed in Top largest taxpayers in Indonesia – and we are focused on utilizing domestic products, said Saptari.

Details of the awards are provided below:

KPC was conferred the award, viz. as:

  • The largest payer of Non-Tax State Revenue for 2018 Mining Company with the Largest Contribution to
    PNBP (Non-Tax Revenue) for 2018
  • Coal Company with the Best Environmental Management in 2018
  • Coal Company with the Largest Domestic Spending in 2018

Meanwhile, Arutmin was earned an award as:

  • Private Company with the Highest Supply for DMO in 2018


Weekly News

Bengkulu Woos Investors with 200 MW Coal-Fired Power Plant

November 21, 2019

Bengkulu will soon complete a long-awaited 2×100 MW coal-fired power plant. A reliable electricity supply will accelerate the province’s economic development and attract investors.

The plant at Sepang Bay, which takes three years to build, will go into full operation in February of next year. The total 200 megawatts (MW) capacity will not only power Sumatra’s western province but also nearby isolated regions.

With approximately two million residents, Bengkulu province suffered an acute lack of electricity. The new power plant will guarantee not only a reliable household electricity supply but will also enable investors to start new businesses in the area and accelerate economic growth.

The US$360 million (Rp 5 trillion) power plant project is operated by privately owned power producer PT Tenaga Listrik Bengkulu (TLB) – a joint venture between PowerChina Resources (PCR), which is a backbone subsidiary controlled by PowerChina, and local heavy equipment distributor PT Intraco Penta (INTA). PCR is the majority shareholder.

The first unit of the plant has already been completed and began to generate electricity in October. The second unit is expected to be fully functional in the end of December. The final COD (commercial operation date) is February 2020. At that time, TLB will supply electricity to state-owned utility firm PLN for the next 25 years.

“We hope all stakeholders will join forces to run and maintain these power plants responsibly so that the people of Bengkulu can benefit from the project,” INTA president director Petrus Halim said during a ceremony at the project site on Nov. 15. He added that the coal plant construction took roughly three years to complete and required a lot of collaboration, support and funding.

The project is part of the Indonesian government’s strategic plans to add another 35.000 MW of power capacity. Bengkulu, a priority region for investment funds, has added Baai Island as a special economic zone.

TLB assures that the project meets official waste-management standards. The company uses advanced technology to control the levels of emission from coal combustion and to prevent toxic coal ash from contaminating the soil and water.

The coal for powering the plants is transported by sea instead of by land. This measure is taken to minimize coal ash pollution during transport.

The plant uses a cooling technology that circulates water to absorb heat. This enables more efficient electricity production. The water is taken from the ocean and flushed back into the sea after use because it is not polluted during the process.

Contaminated water will be treated and reused in the power plant site, mostly to wash the coal and settle dust.

 “The contaminated water never goes out of the site. That means local residents will still have safe groundwater,” said Zul Helmi, one of the power plant’s engineers.

“The first unit of the plant has begun operation at 80 percent capacity, and the pollution from the chimney stack is hardly visible,” said Sun Shuhua, the assistant of the general manager of PCR.

China, which uses coal power extensively, applies stricter air pollution standards and more advanced technology in building power plants than Indonesia does. The two new coal-fired power plants in Bengkulu are being built according to China’s standard, Sun says.

PCR has worked on projects in the Chinese “One Belt, One Road” initiative, which develops infrastructure overseas. From the outset, the Chinese government has fully supported the Bengkulu project.

“We believe that the company has met all the requirements, done the social responsibility initiatives and helped improve the regional economy in Bengkulu,” said Li Hanqing, the first secretary at the Embassy of the People’s Republic of China in Indonesia.

The joint business project is expected to strengthen the bilateral ties between Indonesia and China. The countries have engaged in partnerships in the energy and infrastructure sectors. “I believe mutual support from both countries will spur the economic growth and benefit both countries,” Li said.

“We already created more than 2,000 jobs during the construction and will have around 200 positions in the operation period. Besides, nearly one million tons of coal will be purchased from Bengkulu every year. That will stimulate development of the coal industry in Bengkulu. We will make more and more contributions for the locals,” said Zhao Yong, the TLB general manager.

PCR chairman Sheng Yuming thanked the Indonesian government and the Bengkulu provincial government for their support for the coal-fired power plant project.

 “Our company seeks to continue this partnership in infrastructure and works hard to strengthen the friendship between Indonesia and China.”


Weekly News

Indonesia State Miner Targets 2.1 Trln Rupiah Profit Next Year - CEO

November 22, 2019

Mining Industry Indonesia targets a 2020 consolidated profit of 2.1 trillion rupiah ($149 million), the state mining holding company’s acting chief executive said on Friday.

The 2020 profit is expected to be higher than in 2019, Ogi Prastomiyono told reporters, without providing a 2019 forecast.

State coal miner Bukit Asam PTBA.JK, which is part of Mining Industry Indonesia, is targeting a profit of around 4 trillion rupiah next year, he said.

($1 = 14,080.0000 rupiah)


Weekly News

EU Takes Indonesia to WTO Over Nickel Ore Export Curbs

November 22, 2019

The European Union launched a complaint at the World Trade Organization (WTO) on Friday against Indonesia’s curbs on exporting nickel and other raw materials, which are designed to benefit its own smelting and stainless steel industries.

The European Commission, which coordinates trade policy in the 28-member EU, said the restrictions unfairly limited EU producers’ access to nickel ore in particular, as well as to scraps, coal and coke, iron ore and chromium.

The Commission’s complaint says the measures are part of a plan to develop Indonesia’s stainless steel industry. The country is the world’s largest miner of nickel ore and is set to ban exports for two years from 2020.

Indonesia has become the second-largest exporter of stainless steel and its share of the EU market has risen from near zero in 2017 to 18% in the second quarter of this year, European steel association Eurofer said.

It also says that the manufacturing methods used in Indonesia produce up to seven times more carbon dioxide than the processes used in Europe.

“The risk is that artificially cheap, highly polluting steel displaces cleaner steels from both domestic EU producers and traditional trade partners,” Eurofer said.

China, the world’s largest stainless steel producer, has stockpiled nickel ore ahead of the ban on shipments from Indonesia.

EU Trade Commissioner Cecilia Malmstrom said Indonesia’s measures put further jobs in the EU’s already struggling steel sector at risk.

“Despite our concerted efforts, Indonesia has maintained the measures in place and even announced a new export ban for January 2020,” she said in a statement.

The EU is also challenging a scheme that exempts Indonesian manufacturers from duties on certain imports for upgrading or building a new factory as long as local machinery and appliances make up 30% of content. The EU sees this as an illegal subsidy.

Indonesian government officials were not immediately available for comment.

Shares in European stainless steel producers were trading higher on Friday. Acerinox (ACX.MC) was up 1.0%, Aperam (APAM.AS) 0.6% higher and Outokumpu (OUT1V.HE) up 2.2%.

WTO complaints kick off with a 60-day period for consultations between the parties to settle the dispute. The complainant can then request a three-person panel to provide a ruling. That ruling would typically be at least a year away.


Weekly News

Cokal and China Rail Set Out Five-Year Plan at BBM Coal Project

November 22, 2019

Cokal says it has signed a memorandum of understanding (MOU) with China Railway 21st Bureau Group International Engineering Co (China Rail), to construct the infrastructure planned for mining at Cokal’s BBM metallurgical coal project in Central Kalimantan, Indonesia.

China Rail, a subsidiary of China Rail Construction Corporation (CRCC), has sent a team to the BBM site to carry out a site survey to finalise estimations for the costing of infrastructure construction to enable the parties to conclude a formal contract.

The MOU envisages China Rail carrying out road construction, jetty construction, and overburden stripping and coal mining at the BBM project, the ASX-listed company said.

The Bumi Barito Mineral project (BBM) is a PMA company with an ownership structure of 60% Cokal and 40% Indonesian owners. BBM has defined a total resource of 264 Mt comprised of 10.5 Mt measured, 13.5 Mt indicated and 240 Mt inferred Resources in accordance with the JORC Code 2012.

Road construction at BBM as envisaged in the MOU will be in two areas: 12 km of haul roads from the mine pits to the Krajan jetty to transport coal from both pulverised coal injection and coking coal pits to the Krajan jetty; and upgrading of an existing 55 km logging road to connect to 45 km road already in use leading to a jetty located at Lahung Tuhup, 160 km downstream of the Krajan jetty, bypassing the shallowest parts of the river.

In terms of jetty construction, two barge-loading jetties will be built. The first will be constructed at Krajan adjacent to BBM, and the second at the end of the 100 km haul road at Lahung Tuhup.

The construction of each jetty will incorporate a design to accommodate shallow draft barges, allowance for water depths in excess of 10 m during the wet season, a 1000 t/h barge loading conveyor, and coal handling and storage facilities.

China Railway will also assist in funding the capital investment related to overburden removal, coal mining and associated mine infrastructure including the provision of pit haul roads, sedimentation ponds, camp site facilities, clinic, workshops, fuel storage and mess room, Cokal said.

The MOU specifies a contractual period of five years with an option to extend for an additional five years based on mutual agreement between the parties.

In the meantime, Cokal has signed a barging term sheet with HSM Marine, a Singapore-based barging company with operations in Indonesia, the rest of South East Asia and the Middle East, to barge the coal from BBM.

Cokal’s new strategy to use contractor funding to commence construction, mining and barging has necessitated modifications to its five-year plan, it said. Commencement of the BBM mine construction will begin with China Rail initially constructing a 5 km haul road from Pit 2 (PCI coal production) to the Krajan jetty. At the same time, China Rail will construct a temporary barge loader suitable for initial production.


Weekly News

Indonesia’s Waskita Enters Steel Fabrication Business

Indonesian construction firm, PT Waskita Karya Tbk (IDX: WSKT) enter new business by built steel plant in Cikande Modern Industrial Zones, Serang, Banten to support the various infrastructure projects undertaken by the company, said the spokeswoman yesterday (11/21). The new factory is expected to be operate next month.

In the early stages of production, the new plant built by its unit, PT Waskita Karya Infrastructure, was carried out to meet the needs of a 500 Kilo Volt Ampere (KVA) transmission project in Sumatra with total tower production reaching 4,000 tons per month. The state-owned company’ official, Shastia Hadiarti, said that the steel plant has a total investment of Rp230 billion (US$16.43 million).

While, other state-owned construction heavy equipment provider, PT PP Presisi Tbk (IDX:PPRE) targeting a new contracts Rp7.54 trillion in 2020 supported by nickel mining project and other infrastructure buildings. The amount rises 30 percent compares to this year’ target around Rp5.8 trillion.

According the director finance, Benny Pidakso, its parent company, PT PP Tbk (IDX: PTPP) will become the main contractor of nickel project, while the company will be the sub contractor on the infrastructure project, road building and other projects.

He revealed, PP Presisi has been working on the same project in Kolaka in Southeast Sulawesi and also pitching some projects in Southeast Sulawesi and Central Sulawesi. Beside entering nickel project, the contractor also develop toll road projects.

One of them is the Probolinggo – Banyuwangi toll road project section, part of Trans Java Toll Road. The projects is expected to contribute 2020′ contract target.

Until the third quarter of 2019, the unit of PTPP has booked contract of Rp2.9 trillion. To reached this year’ target, he said, there are several projects need to be finisihing until the end this year, such as Bener Canal in Central Java and Way Apu Canal in Maluku.

Then, the construction of PT Inti Pancar Dinamika’ coal haul roads that partneted with PT Trada Alam Mineral Tbk (IDX:TRAM) and Adaro group. The investment for the project is around $160 million.

The company also works the feeding project from PTPP, like Semarang – Demak toll road project, North Sulawesi steam power plant project, Timor steam power plant project and smelter project in West Kalimantan.

“We are also waiting for the auction announcement of Kediri’ airport,” said the director by adding the airport project will be handled by its unit, PT Lancarjaya Mandiri Abadi with total investment around Rp1 trillion.

PP Presisi was established on May 26, 2004. The company is a construction services provider including civil and building construction with six main business lines civil works, ready mix, foundation work, erector, formwork, and heavy equipment rental.


Weekly News

ITM Manages to Lower Production Cost as Fuel Price and Stripping Ratio Decreased.

Within the same period the company produced 18.2 million tons of coal. For 2019, production volume is targeted at 23.5 million tons.

The world economy remains under pressure as trade war continued, causing global coal demand to lower. On the other side, coal supply has been increasing faster than the demand has, making global coal price continue weaker.

Dealing with such a situation, PT Indo Tambangraya Megah Tbk. (ITM) has made efforts to maximize the bottom line profit by applying three core strategies as follows.

The first is margin improvement strategy. Among others by focusing sales on premium markets (such as Japan) besides seeking new customer segments in domestic and Southeast Asia markets (e.g. Vietnam, Myanmar, Bangladesh).

In addition, the company enhances coal blending activities to improve product quality in attempt to obtain better selling price. Furthermore, the coal trading capacity is expanded to augment product diversity.

The second is cost efficiency strategy. Among others by reducing mining cost such as stripping ratio, getting the most competitive fuel price sources, controlling overhaul cost, pressing logistic cost, rationalizing capital expenditure, making initiatives on cost effectiveness, and leaning on digital capabilities to maintain cost efficiency.

The third is financial management strategy, namely by applying effective cash management approach to support company operations while keeping ample cash reserve, obtaining external funding from financial institutions to take opportunities of organic and inorganic growth as well as balancing debt and equity portion to maintain optimum capital structure.

With rapid technology advancements and a fast-changing environment in the energy sector, ITM sees significant potential to use technology, digital capabilities and mindset to create more value for shareholders.

As a result, we have commenced a digital transformation process. The digital transformation is aimed to improve our technology, our mindset and our organization to innovate ways of work, improve products and services and expand into new business potentials. We believe that the result from the digital transformation will be one core key competency to execute our strategies in the years to come.


Weekly News

Indonesia Plans to Keep $70/T Coal Price Cap for PLN, DMO

Indonesia’s energy minister Arifin Tasrif said on Tuesday his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT Perusahaan Listrik Negara (PLN) next year.

The government capped the price of coal sold to PLN at $70 per tonne from early 2018 after the utility was told not to raise electricity tariffs for certain customers.

The price cap was aimed at shielding PLN from cost fluctuations.

PLN is expected to resume to adjusting its electricity prices every three months in 2020 for customers, such as industrial users.

Tasrif, who was appointed minister last month for Joko Widodo’s second presidential term, said he expects the coal price policy for PLN to remain unchanged.

“If we can maintain the price, why not,” he told reporters. “We need to maintain stability.”

When the price in Indonesian Coal Benchmark Price (HBA) drops below $70 per tonne, the domestic thermal coal price for power stations reverts to HBA.

The so-called domestic market obligation of 25% will also be kept, director general of coal and minerals Bambang Gatot Ariyono told reporters. The rules require coal miners to sell 25% of their output to domestic buyers such as PLN.


Weekly News

Coal Companies Have to Sell 25% of Their Products to The Domestic Market in 2020

Coal companies are required to sell at least 25% of their products to the domestic market by 2020 in accordance with the Domestic Market Obligation (DMO) policies.

Bambang Gatot Ariyono, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, said that his party is currently reviewing the DMO and the reference price. He admitted that the portion of coal that must be supplied for the domestic market did not change next year.

“What is clear is that it may remain at 25%,” Ariyono said as quoted by Kontan on Wednesday (20/11) today.

In addition, Ariyono explained that his party was still not sure about the selling price. In 2019, the DMO coal reference price was set at US$ 70 per ton.


Mining People on The Move

Kingrose Mining Limited - Karen O'Neill

Karen O’Neill Appointed Managing Director

Kingsrose Mining (ASX: KRM) is pleased to advise that Chief Executive Officer Karen O’Neill has been appointed Managing Director, effective immediately.

Ms O’Neill has more than 20 years’ operational and executive experience across mining, investment banking and professional services. She was appointed Chief Executive Officer in May this year. Since then, Ms O’Neill has led a commercially focused operations plan at the Company’s Way Linggo Project in Indonesia, where production has surpassed targets and strategic planning for growth is well advanced.

Kingsrose Interim Chairman Dr Mike Andrews said Ms O’Neill’s appointment to the Board was part of the Company’s strategy to ensure it had the corporate and operational infrastructure needed to underpin a strong, sustainable future.

“Karen’s strong understanding of the mining operations, untiring leadership and commercial acumen is invaluable to the Company at this time and going forward.” Dr Andrews said.



Mining People on The Move

PT Aneka Tambang Tbk - Fachrul Razi

Appointment Of Antam’s President Commissioner As Minister Of Religious Affairs Of The Republic Of Indonesia

PT Aneka Tambang Tbk (ANTAM; IDX: ANTM; ASX: ATM) hereby announces that ANTAM’s President Commissioners, Mr. Fachrul Razi, has recently been appointed as Minister of Religious Affairs of The Republic of Indonesia on October 23, 2019.

Following such appointment, Mr. Fachrul Razi no longer assumes his position as ANTAM’s President Commissioner since the date of his appointment as Minister of Religious Affairs of The Republic of Indonesia, in accordance with the provisions of ANTAM’s Articles of Association and compliance to the applicable regulations. The ANTAM’s Board of Commissioners and Directors would like to congratulate for a new appointment and thank Mr. Fachrul Razi for his dedication and best support to the Company during his tenure.

ANTAM published this release as part of public disclosure pursuant to the Indonesia Financial Services Authority Regulation No. 31/POJK.04/2015 on the Disclosure on Material Information or Facts by Issuers or Public Companies.


Mining People on The Move

BlackGold Natural Resources - Philip Cecil Rickard

BlackGold Natural Resources Chairman, Chief Executive Resigns

BLACKGOLD Natural Resources chairman and chief executive Philip Cecil Rickard is resigning in light of changes to the group’s business strategy and direction, it said on Wednesday.

Mr Rickard, 50, said he has chosen to spend time with his family, since BlackGold’s planned investment in a coal-fired power plant project in Riau, Indonesia failed to pan out. The company had announced it was pulling its plans for the project 11 months ago.

The firm was also entangled in an Indonesian power plant graft scandal last year.

Mr Rickard has helmed the company since March 2018, and will not seek re-election at the company’s upcoming annual general meeting (AGM) to be held on Oct 31.

Andreas Rinaldi, 69, has been appointed CEO-designate with effect from Wednesday. He will replace Mr Rickard as CEO after the upcoming AGM.

Philip Soh Sai Kiang will be re-designated from independent director to independent non-executive chairman of the board following the conclusion of the company’s AGM.


Weekly News

Indonesia Hopes for Environmental Nod Soon for Battery-Grade Nickel Plants

Indonesia’s coordinating minister who oversees mining said on Monday he hoped environmental impact studies for factories to produce battery-grade nickel chemicals would be completed by the end of the year.

The studies, known as AMDAL, need to be completed and approved by the environment ministry before investors can proceed, such as China’s stainless steel giant Tsingshan Group which aims to build a high-pressure acid leaching (HPAL) plant.

Asked whether the AMDAL would be issued before the end of 2019, the minister Luhut Pandjaitan said: “We hope so.”

He said investment plans for plants producing chemicals from nickel laterite were worth $3.2 billion, including the plant planned by Tsingshan and another planned by Indonesia’s Harita Group.

Pandjaitan added that some of the AMDAL studies had been carried out for around a year, but none have been approved so far.

The government was revising a rule on managing waste from HPAL plants, Pandjaitan said, saying that the aim was to have this finalised within a month.

Chinese battery firm GEM Co Ltd, one of Tsingshan’s partners, expects to start trial production at its nickel and cobalt HPAL plant in Morowali in August 2020, the company’s president said earlier this month.

Indonesia wants to become a global hub for producing and exporting electric vehicles (EVs) to Asia and beyond, starting by processing its rich supplies of nickel ore into battery chemicals before it starts building EVs.

The country will stop exporting nickel ore from January 2020, two years earlier than originally planned, in order to handle processing at home.

Pandjaitan said the government would also issue a new rule to allow the import of used lithium battery components to be recycled into a new batteries in Indonesia.

Indonesian law does not allow imports of used lithium batteries, but he said the new rule would allow imports of extracted chemical components from the used batteries.

He said the extracted chemicals could help reduce the use of nickel ores.

“That way we could be more sustainable,” he said, adding that Indonesia wants companies to start investing in lithium battery recycling.


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Publications regularly surveyed are The Jakarta Post, Jakarta Globe, Bisnis Indonesia, Kontan, Coalspot, and various online news services.

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