PT Amman Mineral Nusa Tenggara (AMNT) targets copper concentrate production to reach 1.1 million wet metric tons (wmt) in the 2023 Work Plan and Budget (RKAB). AMNT Vice President Corporate Communications Kartika Octaviana said that the production plan had received approval from the Ministry of Energy and Mineral Resources (ESDM). This year's production plan is up 10.97 percent compared to last year's position which was set at 994,209 wmt. Meanwhile, the government signed the agreement to increase production in line with the decision to ban metal mineral exports in June 2023.
"The approved 2023 concentrate production is 1,103,355 wmt, there is an increase in production which is in accordance with the mine schedule," said Kartika when contacted, Monday (27/3/2023). Meanwhile, the progress of the construction of AMNT's smelter until January 2023 has reached 51.63 percent. The project has absorbed a cost of more than US$507.53 million from a total planned investment of US$982.99 million.
AMNT President Director Rachmat Makkasau said the development of the smelter construction proved the company's commitment to completing one of the current national strategic projects (PSN) in the mineral mining sector. This calculation is in accordance with the realization of budget absorption for smelter construction, which includes physical construction and also the purchase of equipment and machinery for operations. "The company continues to work with our business partners to complete the smelter project as soon as possible. Fabrication equipment has started to arrive in early March and equipment installation has begun," said Rachmat. He estimates that the commissioning of the smelter will be carried out in July 2024 and operate at 60 percent capacity in December 2024. Intensive communication with the government to find the best solution to deal with various challenges over the past 3 years has also been continuously carried out by the company. As previously reported, AMNT and PT Macmahon Indonesia have agreed to work together to work on the Batu Hijau mine Phase 8. Seeing the success of the Batu Hijau mining contract and the bright prospects for copper and gold prices, AMNT decided to expand the Batu Hijau mine by opening a pit known as Phase 8.
The opening of the Phase 8 pit is expected to extend the mine period to June 2028 in accordance with the mine life stipulated in the AMNT and Macmahon Indonesia contracts. Macmahon Managing Director and CEO Michael Finnegan said, with the new cooperation agreement, Macmahon Indonesia will acquire certain heavy equipment from AMNT with a value of US$35 million or around Rp.525 billion (estimated exchange rate of Rp.15,000 per US dollar), to carry out pit work. Phase 8 and as collateral for third party investors. From this transaction, Macmahon Indonesia will receive a monthly return on investment (ROI) on the cost of capital of 15 percent. In addition, Macmahon Indonesia will also have the opportunity to obtain KPI fees of up to US$5.1 million per six months based on overall project performance. "Furthermore, the continuation of this transaction will require approval from Macmahon shareholders considering AMNT is a substantial shareholder of Macmahon Indonesia," said Finnegan in an official statement, Monday (20/2/2023).
For 2023, Macmahon targets revenues to reach around US$1.85 billion - US$1.95 billion, from the previous US$1.6 billion - US$1.7 billion from the Batu Hijau Phase 7 contract cooperation. Meanwhile, the profit before interest target, taxes, and amortization (EBITA) remained in the range of US$105 million - US$125 million. “We look forward to continuing our relationship with AMNT at the highly productive Batu Hijau operation and with a partner who values technology and ESG,” he added. The Batu Hijau mine started production and operations in 2000.
Until 2020, Batu Hijau has produced around 8.78 billion pounds of copper and 8.7 million ounces of gold. For information, PT Medco Energi Internasional Tbk. (MEDC) through PT Amman Mineral Nusa Tenggara controlled a 44.3 percent stake in the Australian company Macmahon in 2017. In Indonesia, Macmahon is also the contractor for the Martabe gold mine in North Sumatra with a contract duration of 5 years from January 2016 from PT Agincourt Resources. Meanwhile in Australia, Macmahon became a contractor for a number of mines, including the Tropicana copper and gold mine, the Telfer gold mine and the St. Ives in Western Australia. In addition, Macmahon is also a contractor for the Byerwen coal mine in the Bowen Basin, Queensland Australia.
