MDKA Reveals Tujuh Bukit Underground Mining Project Estimated to Reach USD 1.5 Billion

PT Merdeka Copper Gold Tbk (MDKA) estimates that the total investment for the Tembaga Tujuh Bukit underground mining project will reach around USD 1.5 billion, excluding the cost of building a smelter facility.

For information, the project, which is run through MDKA's subsidiary, PT Bumi Suksisiindo (BSI), initially started with an investment of USD 200 million in 2018.

"The estimated development of underground mines (Tujuh Bukit underground) and processing to concentrate alone, estimates (investment) between USD 1 billion to USD 1.5 billion, not including smelters," said MDKA Corporate Communications Tom Malik at Mine Tour & Media Workshop, Friday, November 7th.

Currently, PT Bumi Suksesindo operates a mining area of 992 hectares out of a total concession area of 4,998 hectares, based on the Operation and Production Mining Business License (IUP) issued in 2012. The mine site is located in Sumberagung Village, Pesanggaran District, Banyuwangi Regency, in a production forest area.

Meanwhile, the underground mining project is still in the pre-production stage, with new drilling activities being carried out in the surface area. Based on Mineral Resources Estate (MRE) as of March 2024, the Tujuh Bukit project has a resource content of around 8.2 million tons of copper and 27.9 million gold ounces.

For the current year, MDKA targets production of 100'110 thousand gold ounces and 11'13 thousand tons of copper. According to Tom, the production process is going according to the company's plan, although the details of the actual achievements have not been disclosed.

In addition, regarding the plan to build a smelter or mining development cooperation, Tom said that this was still in the internal discussion stage.

“The investment needed to develop its own mine is also quite substantial. So, the management will likely assess whether to pursue a partnership or develop it independently, that has yet to be decided. As of now, there are no concrete plans,” he added.

Furthermore, Tom explained that PT Merdeka Copper Gold Tbk still has a number of large ongoing projects, including the Tujuh Bukit Bawah Gold Resource Gold Mining Project and the Pani Gold Resource Project.

"But Merdeka has big projects that are still running, so of course there will be corporate actions to develop projects. Including the 7 Bukit Bawah Tanah," he explained.

"7 Bukit Cooper, Pani Merdeka Gold Resource, which will start running is the first phase. 2026 starts gold production. The first phase uses the healing Leach method. Later there will be a next phase using the carbon in Leach method. So there will be another investment there," he added.

Simultaneously, he said MDKA was also preparing to transition the operation of the Tujuh Bukit Mine from an open mining system to an underground mine.

Tom said that the Tujuh Bukit open mine still has an operating age until 2030, and his party is trying to keep the transition process going without a break.

"We hope that there will be a direct transition, there will be no pause. However, details have not been released. We are currently having a detailed feasibility study to calculate or design how to mine and project how. (Target) this year the feasibility study should be completed," he said.

Tom said that after the feasibility study was complete, the project would continue to the construction stage, before finally entering the commercial production phase.

Based on the results of a pre-feasibility study (PFS) released in May 2023, when it reaches its peak production, the Tujuh Bukit Copper project is estimated to be capable of processing 24 million tons of ore per year, producing more than 110,000 tons of copper and 350,000 gold ounces each year, with an operation period of more than three decades.

Source: https://voi.id/en/economy/531710

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