PT Merdeka Copper Gold Tbk, a leading gold and copper mining company, has earmarked a substantial capital expenditure (Capex) of up to US$ 750 million (IDR 11 trillion) for several of its subsidiaries. This represents an increase of over IDR 5 trillion compared to the US$ 390 million (IDR 5.8 trillion) allocated in 2022.
David Fowler, the CFO of PT Merdeka Copper Gold Tbk, emphasized the significance of the company’s substantial investment for the current year and stressed the importance of securing funding for their projects. Fowler outlined that US$ 250 million of the Capex will be utilized for the Acid Iron Metal (AIM) plant project, a strategic move in the battery value chain under the management of PT Merdeka Battery Materials Tbk (MBMA).
As many as US$ 90 million will be allocated for the Sulawesi Cahaya Mineral (SCM) mine, one of the world’s largest nickel resources. The SCM mine contains abundant nickel limonite, with a composition consisting of 77% nickel limonite and 23% nickel saprolite, making it suitable for battery nickel production.
Additionally, US$ 110 million will be invested in the Pani gold mining project. The Pani mine, located in the Gorontalo province of North Sulawesi, is an underdeveloped gold resource with significant potential. It is expected to become a low-cost, long-life gold mine with an annual production of over 450,000 ounces, which equals to 14 tons, potentially making it the largest gold mine in Indonesia.
Fowler stated that the feasibility study for the Pani project is scheduled for completion in the third quarter of 2023, with the announcement anticipated in the fourth quarter, followed by the final investment decision.
Furthermore, US$ 130 million will be allocated to the construction of the Zhao Hui Nickel (ZHN) smelter, which is being developed with a production capacity of 50,000 tons of nickel in the form of NPI per year.
PT Merdeka Copper Gold Tbk aims to increase added value to their product by modifying one of the existing RKEF smelter production lines and installing a converter in the ZHN smelter to produce high-grade nickel matte. The remaining portion of the Capex will be utilized for the company’s working capital.
Albert Saputro, the President Director of PT Merdeka Copper Gold Tbk, explained that the company is targeting to increase gold production compared to 2022. The Tujuh Bukit Gold Mine, one of the primary gold production sources for the MDKA group, yielded 125,133 ounces of gold in 2022 with an all-in sustaining cost of US$ 1,131 per ounce. For 2023, the production target for the Tujuh Bukit Gold Mine is estimated to range from 120,000 to 140,000 ounces.
Saputro also highlighted ongoing exploration activities for copper projects at Tujuh Bukit, which are expected to yield optimal results. The Tujuh Bukit copper project is one of the largest pre-production copper projects globally, demonstrating both technical feasibility and economic viability.
In addition to the Tujuh Bukit Gold Mine, PT Merdeka Copper Gold Tbk is currently engaged in the development and exploration of several other gold and mineral mining projects. Notably, the Pani gold project in Gorontalo is among the ongoing ventures. In 2022, the Wetar copper mine produced 19,551 tons of copper, and the projected copper production for 2023 is estimated to
