Harum Energy’s Expansion Plan (HRUM), Allocating USD 400 Million in Capex for 2025
Thu 23 Jan 2025, 10:32 AM
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PT Harum Energy Tbk (HRUM) is accelerating its expansion in the nickel business. HRUM has set aside a large capital expenditure (capex) budget to develop mining projects and downstream industries.
Harum Energy’s Corporate Secretary, Renny Soependi, revealed that in 2025, HRUM has allocated approximately USD 400 million for capex. Just as a reference, that amount is equivalent to IDR 6.51 trillion when converted at the Jisdor exchange rate on Thursday (January 23), which was IDR 16,276 per US dollar.
Renny revealed that the majority of the capex will be used for the development of nickel ore mining operations at its subsidiary, PT Position. HRUM is also prioritizing the completion of the High Pressure Acid Leach (HPAL) project at PT Blue Sparking Energy (BSE).
Last year, most of HRUM's capex was also allocated to the development of the nickel business unit. By the end of 2024, Renny estimates that HRUM will have absorbed around USD 500 million in capex. This amount includes down payments for the purchase of fixed assets.
In line with the aggressive expansion, the nickel business has become a key driver of HRUM's performance. By the end of the first nine months of 2024, the majority of HRUM's consolidated revenue already came from its nickel business unit.
"The contribution of revenue and profit from the nickel business unit is expected to continue growing in the coming years, in line with the increase in the company's nickel production volume," said Renny on Thursday (January 23).
HRUM is targeting an increase in nickel production in 2025. However, Renny did not provide specific details regarding HRUM's production target volume. She only mentioned that the increase in nickel production will be supported by HRUM’s second smelter through PT Westrong Metal Industry (WMI), which will be fully operational.
HRUM is also increasing the utilization of its smelter production capacity, as well as boosting nickel ore production from the PT Position mine to make HRUM’s production more integrated. At the same time, HRUM is focused on driving the HPAL project at BSE to proceed according to plan, with contributions expected to start early next year.
The progress of the HPAL project is currently over 50%. "For the nickel business unit, we will strive to improve operational efficiency in the ongoing projects, given the challenging commodity market conditions expected this year," explained Renny.
As for the coal business, Renny emphasized that HRUM has no plans to acquire new assets in this segment. HRUM will focus on managing and developing its existing assets.
HRUM is also maintaining its coal production volume at an optimal level to keep production costs under control. "The company is targeting a slightly lower production volume compared to last year, in line with the new mining plan to better control production costs," said Renny.
On the stock movement side, HRUM closed trading on Friday (January 24) with a 4.21% decline, reaching IDR 910 per share.
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