Nickel Mining Activities in North Maluku Mines Business Unit CHALLENGES AND OPPORTUNITIES IN INDONESIA MINING AND MINERAL INDUSTRIES IN THE FUTURE Tato Miraza | Development Director PT ANTAM (Persero) Tbk PwC Asia School of Mines 2012 | Bali, November 30 2012 IDX: ANTM | ASX: ATM Outlines Introduction: ANTAM JOURNEY ANTAM in the future: GLOBAL MINING BASED CORPORATION, WITH HEALTHY GROWTH AND WORLD- CLASS STANDARDS Indonesia Mining Industry: OPPORTUNITIES AND CHALLENGES Downstream Mining Industry: TOWARDS INDONESIA ECONOMIC DEVELOPMENT ACCELERATION AND EXPANSION Shipping Activities in North Maluku Mines Business Unit Introduction: ANTAM SUCCESS STORIES INTRODUCTION: ANTAM JOURNEY Our history PERUSAHAAN BADAN PN ANEKA Listed in Antam’s status in ANTAM change NEGARA (PN) PIMPINAN TAMBANG was INDONESIA ASX was its corporate logo TAMBANG EMAS UMUM established by STOCK upgraded to full TJIKOTOK, was PERUSAHAAN- merging several EXCHANGE (IDX) listing established based PERUSAHAAN state-owned on Peraturan TAMBANG single Pemerintah No. 91 UMUM NEGARA commodity Year 1961 (BPU companies PERTAMBUN) was established 1960 1961 1962 1968 1974 1997 1999 2001 2003 2006 2011 PERUSAHAAN PERUSAHAAN PERUSAHAAN Status Listed in Issued US$200 Issuance of Rp 3 TERBATAS (PT) NEGARA (PN) NEGARA (PN) Amandment from AUSTRALIAN million bonds for Trillions bonds for NIKKEL TAMBANG NEGARA LOGAM PN Aneka SECURITIES funding the investment and INDONESIA was BAUKSIT MULIA, was Tambang to PT EXCHANGE FeNi III smelter business established based INDONESIA, was established based ANEKA (ASX) as Foreign construction developments on Akte Notaris established based on Peraturan TAMBANG Exempt Mr. R.E. on Peraturan Pemerintah No. (PERSERO) Abdulkarnen in Pemerintah No. 218 Year 1961 jo Makassar dated 89 Year 1961 Peraturan 16 Juli 1960 Pemerintah No. No. 32 29 Year 1962 INTRODUCTION: ANTAM JOURNEY Long journey in nickel GROUNDBREAKING OF CONSTRUCTION FENI HALMAHERA SMELTER MODERNIZATION AND OPTIMATION OF FENI POMALAA PLANT TAPUNOPAKA NICKEL MINE, COMMENCED OPERATIONS GROUNDBREAKING OF CONSTRUCTION FENI III SMELTER TANJUNG BULI NICKEL MINE COMMENCED OPERATION 2010 2011 2012 FENI II SMELTER COMMENCED COMMERCIAL OPERATION MODERNIZATION ON ROTARY KILN WITH COPPER COOLER DONE BY ANTAM ITSELF. GROUNDBREAKING OF CONSTRUCTION FENI II SMELTER 2000 2004 2006 FENI I SMELTER COMMENCED COMMERCIAL OPERATION BRICK LAYING INSIDE ELECTRIC FURNACE DONE BY ANTAM ITSELF LEMO ISLAND NICKEL MINE , NEAR POMALAA, COMMENCED 1992 1995 1998 OPERATION BY PT NIKKEL INDONESIA FENI III SMELTER COMMENCED MANIANG ISLAND NICKEL MINE , COMMENCED COMMERCIAL OPERATION BY PT PERTAMBANGAN TORAJA 1976 1977 1979 OPERATION DISCOVERY OF NICKEL PAKAL NICKEL MINE IN POMALAA, 1959 1962 1973 COMMENCED SOUTHEAST SULAWESI OPERATION GEBE ISLAND NICKEL MINE COMMENCED 1909 1938 1939 OPERATION LEGEND GEE ISLAND NICKEL Nickel mine POMALAA SMALL SCALE OF NICKEL MINE COMMENCED FeNi smelter plant ORE COMMENCED PRODUCTION PRODUCTION Mine closure POMALAA FIRST NICKEL ORE SHIPMENT OF CLOSURE OF GEBE NICKEL MINE GROUNDBREAKING OF FENI I SMELTER CONSTRUCTION CLOSURE OF LEMO NICKEL MINE INTRODUCTION: ANTAM JOURNEY Long journey in gold PT CIBALIUNG SUMBER DAYA (CSD) AQUISITION PONGKOR II PLANT COMMENCED OPERATION PONGKOR I PLANT COMMENCED OPERATION PONGKOR I PLANT STARTED CONSTRUCTION 1998 2009 2010 PANGLESERAN GOLD MINE COMMENCED OPERATION CIPICUNG GOLD MINE COMMENCED OPERATION 1993 1994 1996 LOGAS GOLD MINE CLOSURE LOGAM MULIA ESTABLISHED 1982 1988 1989 PT CSD COMMENCED OPERATION FIRST GOLD REFINING BY BRAANKENSIEK PONGKOR II PLANT 1957 1971 1977 STARTED CONSTRUCTION 1937 1937 1939 LOGAM MULIA, PULOGADUNG PLANT CONTRUCTION LEGEND LOGAS GOLD MINE, PEKANBARU, Gold mine COMMENCED OPERATION CIPUTER GOLD MINE Gold mine+processing COMMENCED OPERATION /refinery Plant CIKOTOK GOLD MINE Mine closure COMMENCED OPERATION CIKOTOK MINING AREA CLOSURE INTRODUCTION: ANTAM JOURNEY Long journey in bauxite TAYAN CHEMICAL GRADE ALUMINA PLANT CONSTRUCTION TAYAN BAUXITE MINE COMMENCED OPERATION DISCOVERY OF BAUXITE IN PULAU BINTAN, KEPULAUAN RIAU 2010 2011 1920 1935 2009 KIJANG BAUXITE MINE, PULAU BINTAN, COMMENCED OPERATION KIJANG BAUXITE MINING CLOSURE LEGEND Bauxite mine Alumina processing plant Mine closure INTRODUCTION: ANTAM JOURNEY Long journey in iron sand and coal SAROLANGUN COAL MINE ACQUISITION BY PT INDONESIAN COAL RESOURCES LUMAJANG IRON SAND MINE COMMENCED OPERATION KUTOARJO IRON SAND MINE COMMENCED OPERATION 2011 CILACAP IRON SAND MINE COMMENCED OPERATION 1989 1998 2003 1970 1979 1982 CILACAP IRON SAND MINING CLOSURE PELABUHAN RATU IRON SAND COMMENCED OPERATION LEGEND PELABUHAN RATU IRON SAND MINING CLOSURE Iron sand mine Coal mine Mine closure INTRODUCTION: ANTAM JOURNEY ANTAM mining closure BAUXITE MINING CLOSURE IN KIJANG Revegetation IRON SAND MINING CLOSURE IN CILACAP INTRODUCTION: ANTAM JOURNEY Current operations COAL MINE BAUXITE MINE NICKEL ORE MINE Sarolangun, Jambi Tapunopaka, Southeast Tayan, West Kalimantan (PT Indonesia Coal Resources) Sulawesi FERRONICKEL SMELTER AND NICKEL ORE MINE Pomalaa, Southeast Sulawesi NICKEL ORE MINE Tanjung Buli, North Maluku GEOMIN EXPLORATION UNIT Pulogadung, Jakarta Commodities: PRECIOUS METALS GOLD MINE GOLD MINE Nickel PROCESSING & REFINERY Precious metals Cibaliung, Banten Bauxite Pongkor, West Java Pulogadung, Jakarta (PT Cibaliung Sumberdaya) Coal INTRODUCTION: ANTAM JOURNEY Exploration area COAL BAUXITE GOLD GOLD Location: Tayan, Munggu Pasir and Location: Oksibil, Bintang Location: Sungai Keruh, Jambi; Location: Mao, Batuisi and Mempawah, West Kalimantan Mountains, Papua Sintang, West Kalimantan and Karosa, West Sulawesi Activities: grid measurement, test- Activities: early exploration and South Barito Selatan, Central Activities: drilling and mapping Kalimantan pitting, and sampling mapping Activities: drilling GOLD NICKEL GOLD Location: Lalindu, Mandiodo Location: Batang Asai, and Lasolo, Tapunopaka, Sarolangun, Jambi Location: Pongkor and Papandayan, Southeast Sulawesi; Buli, Activities: geological mapping, West Java and Cibaliung, Banten North Maluku and Gag, West sampling Activities: geological mapping, sampling Papua Activities: drilling, mapping In 1H12, ANTAM spent Rp114.5 billion on exploration and mine development activities INTRODUCTION: ANTAM JOURNEY Stock information Stock price (In rupiah)price Stock Since the IPO, the value per share increased 692% to Rp1.430 on May 22, 2012 Current price (in rupiah) Date Open High Low Close Avg Vol Adj Close* Nov 1, 2012 1.290 1.310 1.220 1.250 4.963.400 1.250 Oct 1, 2012 1.340 1.380 1.260 1.280 8.405.500 1.280 Sep 3, 2012 1.250 1.430 1.220 1.350 16.130.100 1.350 * Close price adjusted for dividends and splits. INTRODUCTION: ANTAM JOURNEY Business strategy • Antam is a vertically integrated, export-oriented, diversified mining and metals company • We undertake all activities from exploration, excavation, processing through to marketing • Operations spread throughout the mineral-rich Indonesian archipelago • Many licensed exploration areas and joint venture projects • Diversified product/commodities. Our current business portfolio: NICKEL based commodity GOLD based commodity BAUXITE based commodity COAL based commodity IRON AND STEEL based commodity CPO/PLANTATION based commodity INVESTMENT based company PROPERTY based company Focus On Core Focus on segments that it knows best: Nickel, Gold and Bauxite Business Adding value by moving away from selling raw materials & increasing processing activities Creating Expanding capacity to increase cash generation and lower unit costs Sustainable Continuously striving to obtain cost efficiencies and being environmentally and socially sustainable Growth Maintaining diversified customer base Developing strategic alliances Focus on long-term and sustainable profitability , and flexible dividend policy at 30 – 40% of profits Maintaining Maintain solid balance sheet and healthy debt leverage (Debt/Equity of 2.0x) Financial Maintain healthy liquidity–ensuring debt maturity well spread out over the next 5 years & focusing on long Strength term financing with matching maturity profile against cash flow generation Development of growth projects without burdening balance sheet ANTAM also maintains good and strong relationships with the Government and has a leverage on strong Government support INTRODUCTION: ANTAM SUCCESS STORY Financial performance Solid Revenue Healthy Margins 12000 Rp Bn 40 % Gross Margin Operating Margin Net Margin 10,346 34 9,592 35 8,711 8,744 29 30 28 8000 25 22 18 19 19 19 19 4,492 20 14 14 4000 15 11 9 10 7 7 5 0 2008 2009 2010 2011 1H12 0 2008 2009 2010 2011 1H12 Strong Revenues Supported with Solid Operational Performance Consistent Healthy Margins Solid Cash Position Leveraged for Growth 6000 5,640 Rp Bn 5,223 40 % 4,229 28 29 4000 3,264 30 2,766 20 2000 10 8 10 6 0 0 2008 2009 2010 2011 1H12 2008 2009 2010 2011 1H12 Solid Cash Position to Support Growth Higher Leverage for Growth INTRODUCTION: ANTAM JOURNEY Reserves and resources Saprolite Nickel (‘000wmt) Gold Ore (‘000 dmt) 6,427 6,427 397,350 306,300 317,200 4,834 4,970 4,450 4,246 4,058 3,838 152,450 162,530 2,870 140,800 152 ,450 56,400 50,350 54,200 886 2008 2009 2010 2011 1H 2012* 2008 2009 2010 2011 1H 2012* Reserve Resource Reserve Resource Limonite Nickel (‘000wmt) Bauxite (‘000wmt) 276,700 263,800 267,500 498,850 242,700 447,700 431,090 400,300 407,300 130,300 106,350 106,350 104,500 105,700 70,900 - - - - - 2008 2009 2010 2011 1H 2012* 2008 2009 2010 2011 1H 2012* Reserve Resource Reserve Resource JORC