PT Indika Energy Tbk (INDY) has announced plans to gradually divest from coal mining and expand its business scope to include mineral mining, such as gold and bauxite, as well as green energy.
Expansion to gold mining
In the past, Indika Energy was predominantly focused on coal mining. However, presently, the company is directing investments towards other mining ventures, including gold and bauxite.
Purbaja Pantja, Director & Group Chief Investment Officer of Indika Energy, revealed the company’s strategy. Purbaja shared that Indika Energy has already formed a partnership with PT Masmindo Dwi Area for gold mining. The Awakmas site in South Sulawesi, which Indika Energy is currently exploring, is estimated to contain significant gold reserves of approximately 1.5 million ounces.
“Gold mine reserves are not small, the amount is around 1.5 million ounces of reserves,” Pantja said on May 25, 2023.
Bauxite mining extraction
Apart from gold mining, Indika Energy is also making expansion into bauxite mining. Purbaja mentioned that, together with Mekko Mining, Indika Energy will focus on bauxite extraction in Ngabang, Landak, West Kalimantan.
According to Purbaja, the bauxite mining site has abundant resources, with an estimated 30 million tons of bauxite and reserves of 5.7 million tons. The company aims to achieve an annual production capacity of 1 million tons of bauxite.
“Mekko Mining is located in West Kalimantan, which is indeed an area that is very rich in bauxite. Specifically for Mekko itself, its resources are currently around 30 metric tons and its reserves are around 5.7 metric tons, with a capacity of Production is around 1 million per year,” he explained.
Additionally, Purbaja disclosed that the investment allocated to bauxite mining until the Q1 of 2023 has reached US$15 million, equivalent to approximately IDR 224.1 billion.
“And for bauxite mining, our investment up to Q1 2023 is around nearly US$ 15 million,” Purbaja concluded.
Reducing dependence on coal
Arsjad Rasjid, President Director of PT Indika Energy Tbk, acknowledged that the coal sector currently contributes the most significant portion of the company’s revenue. However, in terms of future prospects, the company is gradually diversifying its operations.
“Slowly we are releasing [coal] but while we are releasing it, we are preparing replacements for example gold and bauxite,” said Rasjid on May 17, 2023.
Arsjad emphasized that the company’s strong commitment to supporting the development of an electric vehicle ecosystem in Indonesia. Therefore, Indika is not only entering the two-wheeler electric vehicle market but is also expanding its involvement in bauxite mining.
Regarding gold, the company’s decision to invest in the Tembang gold project is driven by the positive prospects of gold and the stability of its commodity price. Indika aims to commence production in South Sulawesi within the next 2-3 years.
Additionally, in an effort to reduce reliance on coal, Indika Energy possesses concessions for industrial plantations covering over 170 thousand hectares from four forest concessions it owns. The company plans to develop wood pellets for biomass and carbon offset purposes.
