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Miner MIND ID sets $2 billion annual capex with focus on smelter
Of the total funds, 7 percent will be used for working capital while the remaining 93 percent will go toward several mining downstreaming projects.
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tate-owned mining holding company MIND ID has set its capital expenditure (capex) at Rp 29 trillion (US$2.05 billion) for this year with a focus on developing an alumina smelter.
MIND ID president director Orias Petrus Moedak said on May 7 that, of the total funds, Rp 2 trillion would be used for working capital while the remaining Rp 27 trillion would go toward strategic projects in the pipeline, including metal smelters and a coal-gasification facility.
However, the largest chunk of project capex is earmarked for an alumina smelter at between $700 million and $800 million. The smelter, slated to begin operations in 2023, has a planned capacity of 1 million tons of smelter grade alumina per annum.
“That funding is around 70 percent of the [alumina] project’s total value,” said Orias during a virtual press conference.
State-affiliated mining companies are at the front of the government’s mining downstreaming plans that aim to turn Southeast Asia’s largest economy from a commodity-driven economy into an industrial economy.
The government expects 30 new metal smelters to begin operations over the next three years with state-affiliated companies building many of the larger capacity smelters.
Orias added that the remaining capex would go to coal miner PT Bukit Asam’s coal-gasification facility in Tanjung Enim, South Sumatra, PT Aneka Tambang’s (Antam) power plants in East Halmahera, North Maluku, and PT Freeport Indonesia’s metal smelter to be built in either Gresik, East Java, or in Weda Bay, North Maluku.
MIND ID, legally aluminum maker PT Indonesia Asahan Aluminium (Inalum), owns majority shares in Bukit Asam, gold and copper miner Freeport Indonesia, diversified miner Antam as well as minority shares in privately owned nickel miner PT Vale Indonesia.
MIND ID booked Rp 698.17 billion in net profits last year, turning around a Rp 1.06 trillion net loss booked the previous year, as newly acquired Freeport Indonesia began contributing to income, according to the holding’s financial report filed with the Singapore Exchange.
