The Impact of MIND ID for

National Development
Adhietya Saputra – VP Technical R&D Group MMII MIND ID

National Seminar of Universitas Bangka Belitung

Bangka, 26th September 2019

miningindustry.id
1
A. Introduction
1. The Structure of Mining Industry Indonesia (MIND ID) 3
2. Mandates of MIND ID 4
3. MIND ID Noble Purpose 5
4. MIND ID Performance 6

B. Mandates of Mind ID
1. Manage Indonesia's Strategic Reserves and Resources 9
2. Encourage Downstream Industry and Optimize the Local Content 20
3. Become a World Class Company 32

This presentation has been prepared specifically by MIND ID. The content of this presentation may not be used, 2
duplicated or transmitted in any form without the written consent from MIND ID. All rights reserved.
The Structure of MIND ID

This presentation has been prepared specifically by MIND ID. The content of this presentation may not be used, 3
duplicated or transmitted in any form without the written consent from MIND ID. All rights reserved.
Mandates of Mining Industry Indonesia (MIND ID)

Manage Indonesia's Encourage Downstream

Strategic Reserves and Industry and Optimize the
Resources Local Content

1. Acquisition Strategy 1. Mineral and Coal Downstream

• PT Freeport Indonesia Divestment 2. Smelter Grade Alumina Refinery
• Other Strategic Mining Assets 3. Nickel High Pressure Acid Leaching
Divestment Project
2. Exploration Strategy 4. Nickel Pig Iron Project
• Minimum allocation of 2% 5. Rare Earth Industry
Exploration Budget from Total 6. Energy Strategy (Hydropower plant in
Revenue Asahan, Kaltara, Urumuka, Sulteng)
• Brownfield Exploration Activities
• Greenfield Exploration Activities

Become a World Class

Company
1. Exploration Division
2. Mining and Minerals Industry Institute (R&D)
3. Emerging Leaders Development Program 4
Noble Purposes
: We Explore…
Natural Resources for civilization ,
prosperity, and brighter future

Values :

Integrity Professionalism Synergy Sustainability

Key Behaviour
:
Going
Accounta
Agile Extra
ble
Miles
5
MIND ID Performance

6
Comparison with Other Companies

Big Caps as of Dec ‘18 In trillion Rupiah unless otherwise

stated SoE Asset as of Dec ‘18 In trillion Rupiah unless otherwise
stated

Emiten Income Net Profit Emiten Asset

Astra 239,20 27,37 PLN 1.493
Telkom 130,78 26,98 Bank BRI 1.296
Sampoerna 106,74 13,54 Bank Mandiri 1.202
BRI 102,03 32,42 Pertamina Holding USD 64,7 billion
Mandiri 85,00 25,851 Bank BNI 754
UTI 84,62 11,50 Bank BTN 306
Mind ID 65,28 10,63 Telkom 206
BCA 63,03 25,86 Mind ID 167
BNI 47,06 15,09 Pupuk Holding 139
Unilever 41,80 9,11 PTPN Holding 116*
Note *) as of Dec 2017
7
Financial Perfomance as of Jun 2019

Revenue EBITDA Net Profit

Rp 38,2 T Rp 6,4 T Rp 1,0 T

Asset Debt Cash Equity

Rp 168 T Rp 76,6 T Rp 18,1 T Rp 74 T

8
1st Mandate :
Manage Indonesia's Strategic
Reserves and Resources

9
Exploration Expenditures : Asia vs World

Exploration Expenditures: Asia Exploration Expenditures: World

(1975-2017) (1975-2016)

Exploration expenditures increased

dramatically in the mid-2000s … mainly
driven by China

China Share was

65% in 2017

by commodity

10
Exploration Expenditures vs Discoveries: Indonesia

Exploration Financing in Indonesia Exploration Financing of the Number of Findings in

1985 - 2015 Indonesia 1975 - 2015

11
Exploration Expenditures : Indonesia vs World

12
Exploration Discovery

Giant-sized discoveries are rare …

with an average of only 2 per year

Includes MinEx’s
estimate of unreported
discoveries
Au Ni Cu Zn+Pb U 3O 8
Moderate >100 koz >10kt >100 kt Cu >250 kt >5 kt
Major >1 Moz >100kt >1 Mt >2,5 Mt >25 kt
Giant 6 Moz 1 Mt >5 Mt >12 Mt >125 kt 13
Exploration Discovery

Discovery Performance

14
Exploration Discovery

Discovery Performance

Due to the lack of Tier-1 Discoveries, the industry switches from Wealth
15
Creation to Wealth Destruction
Exploration Discovery

Discoveries In Indonesia 1965 – 2016 Discoveries In Indonesia 1965 - 2015

By Commodity By Size Of Deposit

16
Exploration Discovery : More Concealed Deposits to be found

17
Concerns Affecting Mining Investment In Indonesia

Fraser Institute Annual Report

Survey of Mining Companies 2018

Policy Perception index

Note: higher the score, the better

In 2018 Indonesia was ranked

70 out of 83 jusrisdictions

Indonesia

A recent international survey of mining companies rated Indonesia a difficult place to explore and
operate in 18
MIND ID Future Exploration Plan
Desktop Study
• Finding new prospect area
for acquisition in all
commodities
• Study for lateritic deposit
by- products and rare
earth elements
• Joint Research with
government and
education institution
Reconnaissance and Drilling Resources and Development
Target Appraisal Reserves Definition
• Geology & Geophysics Exploration: • Update FS of Tanjung • Workshop & Training in
surveys in Papua, Bangka • Atlantis, Papua Enim Active mine exploration and
Belitung, Tanjung Enim, • Overseas exploration development Program to
Pongkor and Cibaliung (Laos, Nigeria) • Conduct FS for Arinem enhance Geoscientist
Mine, Papandayan Garut exploration skills &
Assessment: competency
• Banko Tengah, Tanjung • Kucing Liar Ore Body
Enim Metallurgical Assessment • Quality control and
• Buli & Pomalaa accreditation for
• Pongkor • Update Resources and laboratory
• DMLZ & Kucing Liar Reserves Report of all
• Bangka Belitung (Tin & • Seeking opportunity in
commodities
REE) IUP & IUPK auction and
• Tayan, Landak, strategic alliance
Mempawah (Test Pit)
Exploration Budget
2% 19
of total revenue
2nd Mandate :
Encourage Downstream Industry and
Optimize the Local Content

20
MIND ID Downstream Activities

Mine Mouth PP Electricity, Internal Power Station

Coal Gasification DME , Urea,

DME, Urea, Polypropylene
Polypropylene

Activated Carbon Filter for Water / Waste Treatment Plant

Coal

Chemical Grade Alumina Paints, ceramics, lighting

Smelter Grade Alumina Aluminum (Billet, Alloy, Stab, Wire)

Bauxite

Nickel Matte

Ferro Nickel Stainless Steel (Class 2)

Nickel Pig Iron (NPI)

Nickel Sulfide Precipitate

Nickel Battery (Class
Battery (Class 1)
1)
Nickel Hydroxide Precipitate

Cobalt
Cobalt Cobalt Cathode
21
 Tin Chemical
Tin Ingot
Tin Solder
MIND ID Downstream Activities

Tin Monazite Cerium, Thorium, Rare Earth Minerals

Tin Chemical
Tin Ingot
Tin Solder

Zirconium Zircon

Tin Monazite Cerium, Thorium, Rare

Rare Earth Earth Minerals
Minerals
Ilmenite Titanium

Zirconium Zircon
Copper wire,
Copper Concentrate Copper Cathode
Copper Slab
Ilmenite Titanium
Anode Slime Gold
Copper &
Gold Silver
Copper wire,
Copper Concentrate Copper Cathode
Copper Slab

Anode Slime Gold

Copper &
Gold Silver

22
Value Added Illustration

Bauxite Ore Alumina PROJECT HIGHLIGHT

Aluminum

Aluminium
6 ton
Bauxite 2 ton Alumina 1 ton Aluminium
US$ 34/ton US$ 500/ton US$ 1,900/ton

Feronickel
Nickel Ore

Nickel

US$ 3.500/ 100 wmt US$ 12.680 / ton

Electricity
Coal

Coal
23
2000kwh listrik = US$ 10
US$ 50/ton
(0.05 usd/kwh)
Mining Downsteram Contribution
SUMMARY to GDP
OVERVIEW PROJECT HIGHLIGHT
0,62% dari GDP U.S

4,63% dari GDP U.S

Net Exports of Mineral
Raw Materials 7,47 kali Proses Sebelumnya
GO LD , SO DA A SH, ZIN C,
CO N CEN TR ATES, ETC
14,54% dari GDP U.S
Imports: $7.9 billion
Exports: $10.6 billion Mineral Materials 3,14 kali Proses Sebelumnya
Net exports: $2.7 billion Processed Domestically
ALUM IN UM , BRICK, Value Added To Gross
CEM EN T, COPPER, Domestic Product By
Domestic M ineral Raw M aterials FERTILIZERS, STEEL, ETC U.S. ECONOMY
From M ining
Major Industries That
Value of shipments: Consume Processed
CO PPER O R ES, IRO N O RE, SAN D $697 billion
Mineral Materials Gross Domestic
AN D G RA VEL, STO N E, ETC
Product: $17,400
Value: $77.6 billion
billion
Value: $2,530 billion

Metals and M ineral Products Net Imports Of Processed

Recycled Domestically
ALU M U N IU M , G LA SS, STEEL, ETC
Value of old scrap: $31.3 billion
Mineral Materials
M ETALS, CHEM ICALS, ETC
Imports: $149 billion
Exports: $108 billion
Net exports: 41 billion

Net Exports of Old Scrap

Total PDB:
Rp 14.837
G O LD , STEEL, ETC

Imports: $6.4 billion

Triliun
S u m b er: BI, Kem enkeu
Exports: $18.7 billion
Net exports: $12.3 billion
24
MIND ID Strategic Projects

Mine Mouth Power Plant Smelter Grade Alumina Refinery Coal to UDP
(PLTU Sumsel 8 - PTBA) (Inalum - ANTAM) (PTBA – Pertamina – PI – Chandra Asri)

Tanjung Enim 2 x 620 MW Mempawah 1.000.000 tpa Tanjung Enim 570.000 tpa Urea
COD 2022 COD 2022 COD Q1 2023 450.000 tpa PP
400.000 tpa DME

Ferronickel Halmahera Timur Coal to DME Copper Smelter & PMR

(ANTAM) (PTBA – Pertamina – Air Product) (PT Freeport Indonesia)

Tanjung Buli 13.500 ton.Ni Peranap 1.400 KTA DME Gresik 2.000 Ktpa
COD 2019 COD END 2022 COD COMPLETED IN 2023 25
MIND ID Strategic Projects
SUMMARY OVERVIEW
Mine Mouth Power Plant (Tanjung Enim) PROJECT HIGHLIGHT
PROJECT COST
Project Investment
USD 1,7 Bilion
(Inc. IDC and Working Capital

CAPACITY
Coal Mine Mouth Power Plant Electric
ity 2 x 620 MW
CONSTRUCTION
45 Months
COD
2022
Location
Tanjung Enim
26
MIND ID Strategic Projects

PROJECT HIGHLIGHT
Smelter Grade Alumina Refinery
Menpawah,Kalimantan Barat
PROJECT COST
Project Investment
USD 850 Million
(Inc. IDC and Working Capital)

Pabrik SGAR INALUM CAPACITY

1,000,000 pa
CONSTRUCTION
6 ton Bauksit
US$ 34/ton
2 ton Alumina 1 ton Aluminium 3 Years
US$ 500/ton US$ 1,900/ton
COD
2022
LABOR
750 Employees
LOCATION
MENPAWAH,
KALIMANTAN BARAT
27
MIND ID Strategic Projects

PROJECT HIGHLIGHT
Proyek Coal To Urea, Dimethyl Ether, Polypropylene (UDP)
Tanjung Enim PROJECT COST
Project Investment
USD 3,1 billion
Syngas
Coal Methanol DME (Inc. IDC and Working Capital)
(CO & H2) CAPACITY
Urea: 570.000 ton/tahun
Ammonia Urea PP: 450.000 ton/tahun
DME: 400.000 ton/tahun
Polypropyle CONSTRUCTION
ne 3 Years
COD
Q1 2023
LABOR
2000 Employees
LOCATION
TANJUNG ENIM,
SUMATERA SELATAN
28
MIND ID Strategic Projects

Milestone
PROJECT HIGHLIGHT
Haltim Ferronickel Plant Construction Project PROJECT COST
Project Investment
USD 458 Million
Pabrik Feronikel (Inc. IDC and Working Capital)
Haltim CAPACITY

Stainless Steel 13.500 Ton Ni

Ferro Nickel (FeNi)
CONSTRUCTION

Progress 2 Years
Issues
COD & Action
2019

LABOR
374
LOCATION
TANJUNG BULI,
HALMAHERA TIMUR
29
MIND ID Strategic Projects

PROJECT HIGHLIGHT
Project Coal to DME Plant, Peranap, Riau PROJECT COST
Project Investment
USD 3,1 billion
Syngas (Estimated total investment)
Coal Methanol DME
(CO & H2) CAPACITY
Case-1: DME 1400 KTA
Case-1 + Methanol 300
KTA + MEG 250 KTA
CONSTRUCTION
2,5 Years
COD
End of 2022
LABOR
1000 Employees
LOCATION
PERANAP,
PROVINSI RIAU
30
MIND ID Strategic Projects

PROJECT HIGHLIGHT
Copper Smelter & PMR, Gresik East Java
PROJECT COST
Project Investment
Copper Copper
Copper Gold USD 2.8 Billion
Concentrates Cathode
(not include IDC and Working Capital)
Anode Slime Gold CAPACITY
Silver 2,000 Ktpa
Silver Concentrate Processed
CONSTRUCTION
Completed in 2023
OPERATION
Location : Kawasan Industri Java 2023
Integrated Industrial Estate (JIIPE),
LABOR
Gresik
2,000 Employees

COST REALIZED (up to July’19)

USD 152 Million 31
3rd Mandate :
Become a World Class Company

32
MIND ID Exploration Division

MIND ID

Holding Exploration
Division

Exploration Division/Unit

ANTAM Bukit Asam TIMAH Freeport Indonesia

Purpose:
1. Prepare long term exploration plan for MIND ID
2. Create Program Synergies between holding member
3. Set Budget Policy for exploration activities
4. Consolidate, communicate and evaluate exploration activities between holding member
33
Mining and Minerals Industry Institute

Strategic Reserves
Downstream Business World Class Company
Management

MIND ID

Mining and Minerals Industry Institute

Technical R&D Policy Research Global Presence

34
Emerging Leaders Development Program

Preparing MIND ID Future

Leaders to execute on MIND
Technical Skills Development Drive Technical Expertise Group Appointment into ID’s strategic plan and able
to Compete with Global
BOD-1/ BoD
Cross Functional Appointments Cross Company Appointments Mining Companies.
Position:
BOD-2 Engage and develop holding
ELDP (Emerging Leaders Development Program) Holding
Talent Pool member company, aligned to
Company/
MIND ID mandates.
Mobility Operating

Company/ Remain agile in disruption &

Lead in MIH Projects
Subsidiaries
volatile industry.

Industry/SOE Attachments
Improve business results.

Development, appointment and mobility decisions made in consideration of the various job families/career paths chosen

Human Business
Finance Operations Supply Chain
Resource Development
35 35
Thank you
 Exploration Expenditures: World
(1975 – 2016)

40000 Commodity Price

35000
37,163
30000
25000
17,521 Nickel Price (USD/ton)
USD

20000
15000 13,779 Copper Price (USD/ton)
10000 7949 Gold Price (USD/troy ounce)
5000
0
1994

2016
1980
1982
1984
1986
1988
1990
1992

1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
37