Diversified state-owned miner Aneka Tambang (Antam) announced on Monday that it had acquired technology that would help it turn anode slime, which is usually exported, into gold and that was expected to boost the miner'€™s gold production by nearly sevenfold in the long run.

Commercial production, however, will only commence if the government agrees to grant the company a tax exemption to purchase the necessary raw materials, to reduce the burden of the high-cost
operations.

Antam says that it has invested US$500,000 to develop a technology called top blown rotary converter (TBRC), which is able to process annually 500 tons of anode slime '€” a residual substance produced from the process to purify ore in a smelter '€” into precious metals including gold, selenium, palladium and platinum.

The gold produced from 500 tons of anode slime could reach 5 tons annually, or 10 percent of the raw material, Antam operational director Teddy Badrujaman explained.

'€œThe TRBC facility is part of efforts to expand Antam'€™s business in gold commodity and reflects our strategy to intensify revenue from gold,'€ Teddy said in a press conference to launch the development facility, which has been established at Antam'€™s compound in Pulogadung, East Jakarta.

The company will purchase the anode slime from copper and gold miner Freeport Indonesia'€™s smelter in Gresik, also in East Java.

Teddy said that the move was also expected to benefit the country, given that Indonesia usually exported its anode slime to other countries because of the unavailability of technology to process the raw material.

He added that the company expected to further develop the technology to process 2,000 tons of anode slime a year, thus bringing the company a potential 20 additional tons of gold production per year.

This represents a major increase compared with Antam'€™s annual production from its Pongkor and Cibalium sites of around three tons and its annual sales of around 10 tons '€” including from third parties.

The general manager of Antam'€™s gold unit Logam Mulia, Dodi Martimbang, said that the facility to process 2,000 tons of anode slime would be established in East Java, near Freeport'€™s smelter.

He added that the facility would require Antam to disburse a vast amount of money to develop the technology, acquire a plot of land and establish a factory. While Dodi refused to disclose how much capital the company would need to establish the facility, Antam president director Tato Miraza said previously that the investment to develop the facility could reach $3 million.

Dodi also revealed that Antam could start expanding the capacity of the anode slime processing business in around two years, after the company kicked off commercial operation of the initial 500-ton capacity processing facility.

However, he said that the company could only commence commercial operations if the government agreed to remove the 10 percent value-added tax (PPn) imposed on the company'€™s anode slime purchases, arguing that the margin from operating the anode slime facility was so small that the tax might erode the company'€™s entire profit from the operation.

'€œWe have requested that the government waive the tax. We purchased the technology because we want to show the government that this is the proper way to manage our abundance of anode slime resources instead of exporting them to other countries, and we are ready to manage them,'€ he explained.

Energy and Mineral Resources Ministry director general for mineral and coal, R. Sukhyar, who was present during the launch, said that a tax exemption should be given to Antam, considering that a government regulation to be introduced in 2017 will prohibit exports of anode slime, leaving a huge business opportunity to process the substance.

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