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Development of metal mining industry in Indonesia.

Backgrounds

The performance of Indonesia's metal mining industry has not been up to expectation with shrinking production in the past year because of a number of factors and unfavorable condition. The productivity of some metal mines has been on the decline. Many reserves have been almost depleted after years of intensive exploitations. Heavy rains also contributed to the decline in production in 2010.

Meanwhile, the world's demands for metals are growing although decline has been recorded in the demands for certain metal such as nickel as a result of the earthquake triggered tsunami in Japan in March, 2011. The extent of the damage caused by the tsunami on mining industry in Indonesia, however, has yet to be estimated.

The executive director of the Indonesia Mining Association (IMA) Priyo Pribadi Soemarno said so far Indonesia had supplied 55% of the Japanese nickel requirement. Now, however, many factories in Japan have been out of function after the tsunami. Nickel producers in Indonesia are forced to look for buyers outside Japan. It will take some time before exports to Japan is normal again. Japan is expected to take at least two years for recovery.

Unlike nickel, demand for copper is expected to rise in the world market. The country's copper production, however, is expected to shrink 36% to 644,098 tons this year. The declining trend is expected to continue through 2012 with one of the major producers PT Newmont Nusa Tenggara (NNT), has been delayed in the expansion program of the US company.

NNT President Martiono Hadianto said the company's copper production is expected to continue to decline until 2012 as it has just started work in the 6th and 7th phases of its expansion program in Bata Hiram mine in West Nusatenggara.

The country's tin production also decline din 2010 both production of concentrate and metal. Unfavorable climate was the main factor causing the decline. The production fell when the price of that commodity rose sharply.

The mining sector is a major export earner for Indonesia. It will remain a big contributor to the country's foreign exchange income in the coming years.

A number of problem, however, have remained unsolved hampering development of the mining sector such as overlapping in mining concessions and land controlled by forest concessionaires and land appropriated for industrial timber estates (HTI) and plantations and conflicting regulations issued by the central and regional administrations.

Indonesia' mineral reserves

Indonesia is known to be rich in mineral resources, but the reserves for metal mineral reserves have been reduced sharply after years of intensive exploitations. Most of the metal reserves are estimated to last only for 24-33 years. The iron ore reserves, however, still have a longer lifetime.

Gold reserves in Papua, exploited by the US Company Freeport Indonesia are one of the largest gold reserves in the world. Freeport has reported large gold production every year from Papua. Indonesia ranks among major players in gold trade in the world. The country's gold reserves, however, are estimated to have a life time of 33 years. Similarly, the country's copper reserves estimated to total 27.7 million tons are expected to be depleted in 27 years.

Indonesia, which has supplied 50% of Japan's nickel requirement, has only remaining reserves estimated to last only for 25 years to come.

Indonesia has potential reserves of iron sand, but the potentials are not yet sufficiently tapped. The potentials are believed to have an economic life of 130 years.

Grasberg gold reserves in Papua are the largest gold reserves in Indonesia even one of the largest in the world. The reserves have estimated resources of 3,117 million tons. The copper reserves in Batu Hijau, in Sumbawa, West Nusatenggara are estimated to reach 525 million tons.

Other copper mines with reserves of around 75 million tons to 114 million tons are found mainly in Central Kalimantan and North Sulawesi.

Metal Mining Companies

Mining companies in Indonesia consists of local and foreign companies. Some of them have started production, but other are still in the process of construction and explorations.

Large foreign companies and state companies dominate business in metal mining industry in the country. They operate in various areas in Papua, Kalimantan, Sulawesi and Sumatra.

Main players in metal mining industry

Some of the metal mining companies operating in the country are world class players. They are dominant in reserves, production and market. Among them are PT Freeport Indonesia, PT Timah Tbk, PT Antam Tbk and PT Inco Tbk

PT Freeport Indonesia

PT Freeport Indonesia (PTFI) is a local unit of the US giant Freeport-McMoRan Copper & Gold Inc. PTFI has big copper, gold and silver mines in the regencies of Mimika in Papua. The mining complex of PTFI in Grasberg is one of the largest producers of copper and gold in the world. It has the largest proven copper reserves in the world and the world's largest gold reserves.

Currently PTFI uses two mining methods--open-pit mining using only trucks and big electric shovels in Grasberg, and block-caving mining for underground mining or Deep Ore Zone (DOZ).

Open pit mining in Grasberg

PTFI uses big shovels and trucks in Grasberg to produce materials classified as ores or waste depending on the economic value of the materials.

The ores are put into ore crushing equipment before being transported to processing mill. The overburden is disposed of using trucks in a certain places.

DOZ underground mining

In the DOZ block cave, the LHD equipment loads the mud into an ore pass leading to a sliding channel to be loaded into trucks which will carry the material to the crushing equipment. After being pulverized the ores are sent to the processing mill through a conveyor.

PT Timah Tbk

PT Timah Tbk, which is 65% owned by the state and 35% by investing public, is the largest tin miner in the country. It is the second largest tin company in the world in production capacity. It has an annual production capacity of 50,000 tons with a 16% share of the world tin market.

In 2008, PT Timah Tbk verified its tin mineral reserves at 1.06 million tons estimated by Micromine, an independent consultant form Australia. The reserves are estimated to have an economic life of more than 10 years. However, part of the reserves has been damaged as a result of illegal mining. The operations of illegal miners are still a threat to both onshore and offshore reserves.

There are different types of tin produced by PT Tambang by quality known as Banka Tin (with 99.9% Sn content), Mentok Tin (99.85% Sn content), Banka Low Lead (Banka LL) and Banka Four Nine (99.99% Sn content). There are also different types by forms including Banka Small Ingot, Banka Tin Shot, Banka Pyramid and Banka Anoda

PT Timah Tbk is also developing downstream tin industry. The company has built a factory to produce chemical tin in Cilegon, Banten. The factory has a production capacity of 10,000 tons per year. The capacity will be expanded later.

PT ANTAM Tbk

PT Aneka Tambang Tbk (ANTAM) is a publicly traded state mining company 65% owned by the government and 35% by investing public. The company produces several types of metal minerals mostly exported. Its products in clued ferronickel, low and high grade nickel ores, gold, silver and bauxite.

Antam also offers mineral processing and refining services. Currently it has four business units--nickel mining business units, (UBPN) in Southeast Sulawesi, UBPN in North Maluku, gold mining business units (UBP) and precious metal refining and processing business units.

Antam has closed the bauxite UBP in Kijang, on the island of Bintan, but later opened the Tayan unit in West Kalimantan to develop the reserve and process the bauxite into Chemical Grade Alumina in cooperation with Japan's Showa Denko K.K.

Antam's nickel commodities include ferronickel and nickel ores. Nickel ores are produced from its mining units in Southeast Sulawesi and North Maluku and ferronickel is produced from its factories in Southeast Sulawesi. Antam operates two nickel mines in Southeast Sulawesi including Pomalaa and Tapunopaka, and two in North Maluku including in Gee and Buli, and three processing plants producing ferronickel in Pomalaa, Southeast Sulawesi.

Antam's production of nickel ores for exports has a nickel content of 1% to more than 2%. All nickel production of Antam including nickel ores and ferronickel has been exported. Ferronickel has been exported to South Korea and Europe, and high grade nickel ores are exported mainly to Japan and Europe and low grade ore to Japan and China.

Antam has nine subsidiaries with majority share directly owned, one with majority share indirectly owned, and two other companies owned by the subsidiaries. Those with majority share directly owned by Antam are :

PT Antam Resourcindo which is a mineral exploration company and operator of mines with 99.98% controlled by Antam.

PT Indonesia Chemical Alumina (ICA), which is an alumina processing company and mining contractor now developing the Tayan Chemical Grade Alumina project with Antam having a 80% stake.

PT Cibaliung Sumberdaya (CSD) which operates the Cibaliung gold mine in Banten with Antam having a 99.15% stake.

PT Indonesia Coal Resources (ICR) which operates in coal mines and now developing the Sarolangun coal mine with Antam having a 99.98% stake.

Asia Pacific Nickel Pty. Ltd. (APN), an investment company wholly owned by Antam.

PT Mega Citra Utama and PT Borneo Edo International, both holders of bauxite mining concessions 99.5% owned by Antam.

PT Abuki Jaya Stainless Indonesia which is a stainless steel processing company 99.5% owned by Antam.

PT Dwimitra Enggang Khatulistiwa, which is a holder of bauxite mining concession wholly owned by Antam.

In 2010, Antam's reserves of nickel ores and nickel mineral resources declined. Its Saprolite Nickel reserves shrank 17% and Limonite Nickel reserves dropped 20%, while its gold reserves rose 4% and bauxite reserves increased 6%.

Proven and available reserves of PT Antam rose in 2010--Saprolite Nickel by 8%, gold by 19% and bauxite by 1%.

PT International Nickel Indonesia Tbk (PT INCO)

PT INCO produces nickel in matte, which is an intermediate material of lateritic ores in its integrated processing facility near Sorowako in Sulawesi.

All production of Ni- in Matte of PT INCO is sold under long term contract to Vale Canada and Sumitomo Metal Mining Co.Ltd.

PT INCO's shareholders are :

Vale Canada Limited : 58.73%

Sumitomo Metal Mining Co. Ltd : 20.09%

Public : 21.18%

Nickel proven reserves and inferred reserves owned by PT INCO in 2010 declined from 2009. In 2009 its proven reserves totaled 82.3 million tons down to 75.4 million tons in 2010. Its inferred reserves also fell to 38.3 million tons from 38.8 million tons in the same period. The decline followed years of exploitation.

Bad weather hampers production of metal minerals

In general the country's metal mining production declined in 2010, but increases were recorded in the production of some mineral metals like Converter Matte, Ni + Co in Matte, and ferronickel (Fe Ni).

The country's production of copper fell from 998,530 tons in 2009 to 878,376 tons in 2010 ; gold production dropped from 127,716 kg to 104.600 kg in the same period and bauxite production shrank 783.097 mt to 104,692 mt as a result of unfavorable weather with high rainfalls.

Bad weather also caused a decline in the production of tin when the price of that commodity rose in the world market.

Gold production fluctuates

The country's gold production has fluctuated over the past years. In 2007, the country's gold production surged 42.8%, but in 2008, the production fell deeper by 45.4%, from 117,854 kg to 64,390 kg. A steep rise was recorded in 2009 when production shot up 98.3% to 127,717 kg. In 2010, the production gold shrank again to 104,600 kg.

PT Freeport Indonesia remains the largest producer. In 2010, that company produced 61,833 kg of gold or almost 60% of the country's total gold production. PT Newmont Nusa Tenggara followed as the second largest producer of gold in Indonesia. Unlike PT Freeport, which recorded a decline in production in 2010, PT Newmont Nusa Tenggara has continued to post an increase in output . In 2010, PT NNT recorded an increase in production to 22,930 kg from 17,406 kg in 2009.

The process of production of PT Newmont Nusa Tenggara was not affected by bad weather that it could continue to operate normally in its mines in Nusatenggara .

PT Nusa Halmahera Minerals recorded a substantial increase in production from 10,434 kg in 2009 to 15,122 kg in 2010.

PT NNT boosts copper production in 2010 before expansion

The country's production of copper metal and (copper concentrate declined in 2010 . PT Freeport attributed the decline to low content of the mineral ores in the Grasberg mine. The production of copper concentrate of PT Freeport Indonesia dropped from 2,731,769 dmt in 2009 to 2,575,006 dmt in 2010, and that of copper metal fell from 774,661 tons in 2009 to 632,325 tons in 2010.

Meanwhile, the cooper concentrate production of PT Newmont Nusa Tenggara rose from 752,355 dmt in 2009 to 891,765 dmt in 2010 and its production of copper metal reached 246,051 tons in 2010 up from 223,869 tons in 2009.

The production of PT NNT began to decline 2011 as it is in the process of expansion with its 6th and 7th mining phases. The decline is expected to continue until 2012.

Production of tin declining

Indonesia's tin production has continued to decline both in concentrate and metal. The country's tin producer PT Timah Tbk reported production at 51,818 tons of tin concentrate in 2006. The production fell in the following years to as low as 35,535 tons in 2010. Its production of tin metal also fell over the years to reach only 38,216 tons in 2010.

Another tin miner PT Kobatin also recorded a decline in production from 29,115 tons of tin concentrate in 2006 to 8,051 tons in 2007 and to 7,723 tons in 2010.

Its production of tin metal dropped from 20,720 tons in 2006 to only 5,802 tons in 2007 and to 5,616 tons in 2010.

Nickel production stable

The country's nickel production has been relatively stable over the past years with slight fluctuations. Nickel ore production of PT ANTAM in 2006 totaled 4,353,832 wmt, up to 7,112,870 wmt in 2007. In 2008, the production fell to 6,571,764 wmt and again to 5,432,812 wmt in 2010.

ANTAM's production of ferronickel totaled 14,474 tons in 2006 and it was almost unchanged until 2010 when production totaled 14,277 tons.

The nickel production of PT INCO also was relatively stable. However, demand for the metal is expected to decline from Japan for at least the next two years following the tsunami. Japan has been the main buyer of nickel from the country.

Business players in metal mining industry almost unchanged

Foreign investors and state companies dominate business in metal mining industry in the country.

PT Freeport Indonesia and PT Newmont Nusa Tenggara are the main producers of copper, silver and gold in Indonesia. PT Aneka Tambang and PT INCO lead in the production of nickel and PT Timah and PT Kobatin dominate the business in tin mining industry.

Eastern Indonesia main producer of metal minerals

The country's production of metal minerals comes mainly from eastern part of Indonesia. Papua is the largest producer of copper, gold and silver, followed by West Nusatenggara and Maluku.

Southeast and South Sulawesi are the largest producers of nickel and main suppliers of that metal for Japan. South Sulawesi is also a major producer of gold and silver.

Bangka Belitung is one of the world's largest supplier of tin in the world produced by PT Timah Tbk and PT Kobatin. West Java also has substantially large reserves of gold and silver produced by PT Aneka Tambang Tbk .

Domestic sales

Domestic market is not the main market for the country's production of metal minerals . Most of the production has been exported because of inadequate or unavailability of processing or refining facilities in the country.

Copper sales on the domestic market totaled 216,761 tons in 2008, up to 240,782 tons in 2009. In 2010, sales fell to 227,812 tons. Similar trend was recorded in the sales of gold and silver.

Improved condition of the country's economy in the second half of 2009 was followed with an increase in demand for metals in the country after the slump earlier that year.

The slump in the world market with the delay in the recovery of major economies from the global crisis like the United States and Europe caused marketing problem for export oriented companies especially among metal mineral producers in the country.

Exports of metal minerals

The country's exports of metal minerals decline din 2010 compared to exports in 2009. Increases, however, were recorded in the exports of some commodities like nickel metal. Exports of nickel ores, however, declined.

Exports of copper fell slightly from 698,190 tons in 2009 to 597,231 tons in 2010. Similarly exports of gold dropped from 102,081 kg in 2009 to 78,644 kg in 2010' Silver exports declined from 303,346 kg in 2009 to 206,829 kg in 2010.

Gold exports down on decline in performance of PT Freeport

The country's exports of gold fell to 77,280 kg in 2010 from 100,571 tons in 2009. The decline was marked by the shrinking exports by PT Aneka Tambang (Antam) to 4,499 kg in 2010 from 12,893 kg in the previous year and sharp fall in the exports of the countries largest producer PT Freeport to 37,417 kg in 2010 from 63,758 kg in 2010.

Increase, however, was recorded by PT Newmont Nusa Tenggara with exports reaching 19,279 kg in 2010 up from 12,957 kg in the previous year. Substantial increase was also recorded by PT Nusa Halmahera Minerals to 14,805 kg in 2010 from 9,785 kg in 2009.

Nickel exports in 2011 feared to decline

Indonesia's exports of nickel grew from year to year from 2006 until 2010. PT Inco is the largest producer of nickel in reported sales at 72,879 tons in 2006 up to 77,035 tons in 2010. Nickel exports by PT Antam grew from 13,389 tons in 2006 to 16,590 tons in 2010.

Nickel exports in the next two years are expected to decline with shrinking demand from Japan, so far the largest buyer of the country's nickel . Japan is expected to need at least two years to recover from the impact of the devastating tsunami in March.

Tin exports shrinking

Indonesia's tin exports in the past five years have tended to be flat . In 2010, tin exports even declined from 2009. Exports by PT Timah totaled 40,507 tons in 2010, down from 49,240 tons in 2009 and exports by PT Kobatin fell to 5,55 tons in 2010 from 6,15 tons in 2009

Rampant operations on illegal miners in the country caused problem in the development of the country's tin mining industry. Unfavorable weather has also hampered production resulting in shrinking productivity and exports.

Singapore the main buyer of Indonesian tin, 2011

Singapore was the largest buyer of Indonesian tin in March. Tin exports to that country totaled 7,304.11 tons or 80% of the country's total exports in March. Exports to Japan totaled only 304.64 tons in the same month.

Marketing

There are a number of systems of marketing metal minerals. Among the systems are long term contracts such as between PT INCO and Vale Canada and Sumitomo Metal Mining Co. which are the main shareholders of the country's largest nickel producer. PT Antam also has a number of customers.

Sales of the production of PT INCO are handled by Vale Canada and Sumitomo Metal Mining Co. PT INCO, therefore, pays no costs of marketing and sales. PT INCO is bound by long term sales contracts. The contract will end in 2025, if not extended, modified or renewed.

The new price of Vale's nickel is calculated with a formula based on the cash price of nickel at the London Metal Exchange. The selling price to Vale was US$ 1,021.7 million in 2010 and US$ 610.3 million in 2009. The selling price to Sumitomo Metal Mining Co. was US$254.6 million in 2010, up from US$ 150.7 million in 2009.

PT Antam has different customers among nickel consumers. The company has long term contracts with customers in various countries. Most of its nickel production is exported to Europe and other Asian countries where it has old customers for decades.

Its selling prices for nickel, ferronickel and bauxite are based on prevailing prices in international market. The company sells nickel ores to leading ferronickel producers, ferronickel to producers of stainless steel producers and bauxite to alumina producers under short and long term contracts. Gold and silver are generally sold directly to consumers.

Antam has a working unit called Marketing and Customer Support (MCS) for nickel ores, ferronickel and bauxite. It also has representative office in Tokyo, Japan, to arrange exports and shipments to countries Asia. It also has such representative office in Europe. .

Gold and silver are sold through UBPP Logam Mulia directly to consumers in the country mostly in retail. Antam also exports gold to Singapore.

The company takes part in various international fairs to promote and sell gold, silver and precious metal processing services. It also sells gold and silver in dinar and dirham coins and in souvenirs.

Payments for Antam's products are generally with letter of credit and through bank transfer. Nickel ores and bauxite are sent on FOB term, and ferronickel with CIF term. In 2010, the market share of Antam was relatively unchanged. Its share of the global market for nickel including ores was around 5% in 2010. The market share for ferronickel alone was 1% of the world's market.

PT Timah sells its tin production through its subsidiary Indometal London Limited (Ltd). Tin production of PT Timah Tbk averages 45,000 tons a year and its has a 16% share of the world market.

China is the world's largest tin producer, but most of its production is for domestic consumption that many buyers in the world have to rely on PT Timah for tin supply.

As a sales agent, Indometal London Limited (Ltd) handles the distribution and marketing of Antam's tin production in Europe and the United States. In Asia Pacific, the company handles the marketing itself.

Waste treatment vital for the survival of mining operations

Proper treatment of waste of metal mineral mining is important otherwise the effects will be bad. The waste could endanger the ecosystem and human health. Treatment of mining waste, therefore, should be in line with the standard system.

The government threatens to close mines and revoke the mining license if companies fail to comply with the regulation to properly treat mining waste or tailings. Cases involving a number of mining companies including an international gold miner have been brought to court on charge of failure to preserve the environment.

A number of big mining companies such as PT Freeport Indonesia have program for mining waste treatment depending in the environmental condition and the type of minerals. PT Freeport Indonesia uses river to control mining tailings and waste.

PT Freeport has large quantity of tailings in the process of separating copper and gold from materials having no commercial value like rocks and water.

Considering the topography of the mining area , seismic activities and rainfalls, which are exceptionally high in some locations, PT Freeport adopted a processing system for tailings utilizing river to dispose of the mining waste in a selected place called Modified Deposition Area (ModADA). The system of disposing of the mineral tailings used by PT Freeport has been approved by the government.

If the mining operation has been stopped or after the reserves have depleted the tailing disposal areas reclamation or refilling of the abandoned land is required to be available for farming or other purposes. The cost of the program of waste treatment could reach up to US$15.5 million a year.

Gold mining tailings are dangerous to human health, therefore, have often triggered conflicts between the local people and mining companies. Tailings from gold explorations, mining and processing of gold ores are potential causes of environmental pollution.

Case of pollution in North Sulawesi known with the Buyat water pollution involving Pt Newmont Minahasa Raya had gone to court. The local people filed a legal protest against PT Newmont Minahasa Raya accusing the company of causing sea pollution.

Treatment of waste is to reduce or eliminate poisonous materials before the waste is disposed of.

Heavy metals are widely used in industries such as cadmium (Cd) which is used for battery that could be refilled; copper (Cu) which is used for electrical cables, nickel (Ni) which is used as basic material of stainless steel, lead (Pb) as basic material for storage battery; zinc (Zn) for can coat, mercury (Hg) to dissolve gold. In the Buyat case, mercury found n the waters is suspected to have come from the mineral tailings disposed of by Newmont Minahasa

In the mining of bauxite in Tayan, West Kalimantan, PT Antam uses a system of waste treatment called red mud. The system has been used in many countries having alumina industry.

In order to support development of bauxite ores through the establishment of an alumina industry the Research and Development Center of MIRA and PT. Antam agreed to cooperate in carrying out research such as in the research of the utilization and processing of Red Mud. Research in the processing and utilization of red mud will be implemented through two channels--research in the reuse of red mud, and research in the processing of red mud until Zero Waste-Red Mud Processing.

Main points that need to be observed in determining the size and importance of the environment impact on extraction activities and disposal of waste are:

1. Width and depth of mineralization zone

2. Quantity of minerals to be extracted and to be removed to disposal place.

3. Possibility of poisonous waste of mineral rocks

4. Potential of emergence of mine acid water

5. The impact of human health and security in transport, storage and utilization of explosives and poisonous chemicals, radio active in the mining area and dust that affect respiration..

6. Geotechnical characteristics of rocks and possibility of using the rocks for civil construction (such as landscaping, dam tailing, or layers of clay to coast tailing disposal place).

7. Management (piling place, controlling and disposal) of mud (for removal of overburden from dredging mining system and placer).

8. Damage of the land and land slides as a result of underground mining activities.

9. Issuance of methane gas from underground coal mines.

Potential impact of the mining activities is that it will affect the quality of water, hydrology, flora, and fauna, and cause the loss of natural habitat, population migration, loss of cultural heritage and loss of farm land and damage to forests.

Indonesia's mining policy marked with conflicting regulations

Mining activities in Indonesia have been hampered by conflicting and discordant policies of among relevant agencies marked with overlapping mining concession and protected forest areas.

In line with Chapter 38 of the Law No. 41/1999, protected forests are closed to mining operation including open pit mining to preserve the ecology in the tropical forests. However, most mineral reserves are found in forested areas including protected forests.

The government has issued a regulation (PP) No. 10/2010 on the revision of forest area appropriation and function and PP No. 24/2010 on the utilization of forest area issued in February 2010. The regulation says that development of forest areas must not change the function of forests.

After the issuance of the regulations of the mining Law UU No.4 of 2009 on 12 January 2009 on the Law on Mineral and Coal mining replacing the Law UU No.11/1967, changed the condition of business in metal mineral mining in Indonesia. Important changes in the new mining law include :

* Mining licensing system changed from contract system to license system called Mining Business License (IUP) secured through tender excepting for state companies.;

* Obligation for investors to process all mineral products into metal in Indonesia, either by building own smelter or by using smelters of other companies.

New Investment and Mining Expansion by PT Antam Tbk

PT Antam is preparing development of a number of mining projects ahead of the implementation of the government regulation banning exports of unprocessed metal ores in 2015.

The projects include:

Tayan Chemical Grade Alumina project

Antam has established a joint venture with a Japanese partner in 2007 named PT Indonesia Chemical Alumina (PT ICA) to build CGA plant in Tayan in the regency of Sanggau, West Kalimantan.

The CGA project is 80% owned by Antam and 20% by the Japanese partner Showa Denko K.K. (SDK).

The CGA factory will have a production capacity of 300,000 tons per year. Around 200,000 tons of the production is to be exported to Japan for SDK in place of CGA which is no longer produced by its factory in Yokohama. The remaining 100,000 tons will be sold on the domestic market. The CGA project is estimated to cost US$ 450 million. Around 65% of the cost is to be covered with loans and the rest in equity.

In 2010 the Engineering, Procurement and Construction (EPC) contract for the CGA project was signed with the consortium of PT Wijaya Karya (Persero) Tbk, Tsukishima Kikai Co. Ltd. And PT Nusantara Energi Abadi (Nusea).

Preconstruction work has been completed including land leveling and land clearing. Antam and SDK hope to sign loan deal with the financers and start work in 2011 to be completed in 2014.

Halmahera Ferronickel Project

Antam's ferronickel (FeNi) project in Halmahera is estimated to cost US$ 1.6 billion including for a 260 megawatt power plant. Antam plans to build the power plant under the Independent Power Producer (Ipp) scheme. The power plant is expected to save energy cost. Without the power plant the project will cost around US$ 800 milliion--US$ 900 million.

In 2010 Antam completed the feasibility study and basic design of the project. Antam hopes to start construction in November in 2011 to be completed and operational in 2014.

Modernization and Optimization of Pomalaa Coal Fired Power Plant

The first ferronickel factory of Antam came on stream in 1995 and the second in 1995 Antam plans to improve the efficiency of the two old factories through modernization and optimization.

The plan includes construction of coal-fired power plant to support the operation of the factories. In 2010, Antam focused on finalization of the feasibility study on the project.

Construction is expected to start in 2011 with factory overhaul that will take 4 months. The plan also includes upgrading of the first unit of FeNi factory and supporting facilities such as port. The project to be completed in 2014 will cost around US$ 450 million--US$ 500 million.

Mandiodo Nickel Pig Iron (NPI) Project

Originally the NPI project was planned by Antam in cooperation with Jindal Stainless Limited of India. Antam already signed a joint venture agreement with Jindal in 2008 to build a nickel smelter and stainless steel plant in Konawe Utara, Southeast Sulawesi. Antam was to have a 55% stake in the venture with Jindal taking the rest. Later, however, Jindal quit late 2010 and Antam became the sole owner.

The name of the joint venture company was changed with PT Abuki Jaya Stainless Indonesia. The NPI factory is designed with a production capacity of 120,000 tons per year.

The project is estimated to cost US$398 million. In 2010, Antam carried out the bankable feasibility study (BFS) of the project. In 2011, Antam has yet to complete land clearing and review the feasibility study. The NPI project is expected to be operational in 2015.

Mempawah Smelter Grade Alumina (SGA) Project

Smelter Grade Alumina/Metallurgical Grade Alumina (SGA) a process product of bauxite ore to be used as the feedstock for aluminum. Different from CGA, which has the market niche, SGA has open market characteristics traded in a bourse.

The only SGA consumer in Indonesia is PT Inalum which a producer of aluminum and a joint venture between the government and a Japanese consortium.

Antam is developing the Mempawah SGA project in West Kalimantan. The SGA factory is to have a capacity of 1.2 million tons of alumina per year. The project is estimated to cost US$ 1 billion. Antam cooperates with Hangzhou Jinjiang Group (HJG) of China. Antam has a 49% stake with an option of acquiring another 2% stake after three years in operation.

In 2010, Antam signed a First Amended and Restated Joint Venture Agreement, (JVA) with HJG. r Antam and HJG continued feasibility study before naming the EPC contractor and seek the financer. The SGA project is expected to be operational in 2015.

Steel plant in South Kalimantan

In 2010, Antam and state steel maker PT Krakatau Steel Tbk started the phase of construction of a joint venture steel project in South Kalimantan. The iron making cooperation project will use the technology of rotary kiln in Batulicin, in the regency of Tanah Bumbu, Kalimantan Selatan.

The joint venture company PT Meratus Jaya Iron & Steel is 34% owned by Antam and 66% by Krakatau Steel and the South Kalimantan provincial administration. The factory is designed to have a production capacity of 315,000 tons of sponge iron a year. The project is estimated to cost US$ 150 million. It is to be operational this year (2011).

In long term the factory will be expanded into an integrated steel factory with a capacity of 1 million tons.

Opening of new mines

In 2010, Antam planned development of new mines including nickel, gold and bauxite mines ...

Antam already opened new nickel mines in the area of Tapunopaka. Antam has shipped its first export of 50,000 wmt of nickel ore from Tapunopaka. The company hopes to be able to produce 1.5 million wmt of nickel ores per year from Tapunopaka. The mine is also expected to supply nickel ores to the Mandiodo NPI factory.

In addition to Tapunopaka, Antam also is preparing development of nickel mines in Pakal and Mandiodo. Development of the two mines are expected to be underway in 2011.

Antam has opened new gold mines in Cibaliung, Banten, and now it is in the process of explorations.

After the closing of the bauxite mine in Kijang, Antam began development of a new bauxite mine in Tayan, West Kalimantan. The mine will supply bauxite to the Tayan CGA project.

Prospects and Conclusion

There have been hurdles hampering development of metal mineral reserves resulting in a decline in the production and sales of some metal minerals such as copper, tin, gold and silver in the past year. The production of the four minerals decline din 2010. Unfavorable climate with heavy rains was among the culprit causing the decline in production. Heavy downpours forced mining operation in some areas to stop at least temporarily.

Some producers could not operate at full capacity as the process of expansion and development interrupted production.

The prospects, however, are more encouraging in 2011 with the surge in the prices of the commodities. Demand grows with the improvement of the global economy.

PT Timah (Persero) Tbk predicted that the world's tin consumption will increase 10% in 2011 from 330,000 tons in 2010 to follow the revival of electronic and consumer good industries. The world's tin production, therefore, is expected to increase to 345,000 tons. The production still falls short of the world's demand of around 370,000 tons in 2011.

Gold production is expected to grow boosted by growing demand good price at around US$ 1,300 per troy oz. A prediction even puts the price at US$ 1,500 per troy oz. Big imports by China, India, Russia and Saudi Arabia keep the price on the increase.

Antam hopes to produce 4 tons of gold in 2011 mainly from Pongkor and Cibaliung, its two largest gold mines. Antam also hopes to have substantial gold production from PT Nusa Halmahera Minerals (NHM), which plans to increase its production to 15,122 tons this year.

The government regulation (PP) No. 10/2010 on revision of appropriation of forest lands and PP No. 24/2010 on the utilization of forest land issued in February 2010 are expected to solve problem over legal issue involving operations of a number of mining companies.

==
Table--1
Estimates of Indonesia's Mineral Reserves
 Estimate
 of economic
 life of
 reserves (y)
Mineral Units Reserves

1. Gold Tons of Gold 4,401 33
--In Porphyry Copper 3,689
--In gold ore 714

2. Copper (porphyry) Million tons of Cu 27.7 27
 (copper)

3. Nickel Thousand tons of Ni 512 25
 (nickel)

4. Tin 000 tons of Sn 1,360 24
 (Tin)

5. Bauxite 000 tons of 32,650 27
 [AL.sub.2][O.sub.3]

6. Iron Sand 000 tons of 40,500 130
 [Fe.sub.2][O.sub.3]

Source: ESDM

Table--2
Estimates of Indonesia's gold reserves

Mining sites Types of mineral Regions

Grasberg Porphyry Papua
Batu Hijau Porphyry West Nusatenggara
Kelian Low Sulphidation Central Kaimantan
Gunung Pongkor Low Sulphidation West Java
Cabang Kiri East Porphyry North Sulawesi
Busang Low Sulphidation East Kalimantan
Mesel Sediment Hosted North Sulawesi
Mount Muro Low Sulphidation Central Kalimantan
Gunung Pani Low Sulphidation Sulawesi
Kayubulan Ridge Porphyry Sulawesi
Lanut Low Sulphidation Sulawesi
Sungai Mak Porphyry Sulawesi

 Resources
Mining sites Status (million tons)

Grasberg Production 3,117
Batu Hijau Production 525
Kelian Mine Closed 114
Gunung Pongkor Production 105
Cabang Kiri East Production 79
Busang Feasibility 75
Mesel Mine 62
Mount Muro Mine Closed 52
Gunung Pani Local Mine 41
Kayubulan Ridge Exploration 35
Lanut Production 29
Sungai Mak Exploration 33

Source : ESDM

Table--3
Metal mining companies

 Companies Mineral Mining sites

1. Production Stage

PT ANTAM Tbk Gold, Nickel, bauxite Bangka, Riau, Maluku

PT TIMAH Tbk Tin Bangka Belitung

PT Freeport Indonesia Copper, gold silver Papua

PT International Nickel Sulawesi
Nickel Indonesia Tbk

PT Newmont Nusa Copper, gold, silver Sumbawa / NTT
Tenggara

PT Koba Tin Tin Bangka

PT Gunung Kikara Tin Bangka
Mining

PT Karimun Granit Granite Karimun / Riau

PT Prima Lirang Gold Maluku
Mining

PT Avocet Bolaang Gold Bolaang Mongondow,
Mongondow North Sulawesi

PT Galuh Cempaka Diamond Tanah Laut,
 S. Kalimantan

PT Natarang Mining Gold Construction

PT Nusa Halmahera Gold Halmahera / N. Maluku
Minerals

2. Construction Stage

PT Kasongan Bumi Gold Tanggamus / Lampung
Kencana

PT Meanus Halmahera Gold Minahasa / N. Sulawesi
Mineral

PT Nusa Halmahera Gold North Halmahera/
Mineral N. Maluku

Operational Stage / Mineral Mining Site
Company

3. Production Stage

PT Meratus Sources Gold Kotabaru /
Mas S. Kalimantan

PT Paragon Perdana Gold S. Lampung
Mining

PT Nabire Bakti Gold Paniai, Fakfak /
Mining Papua

3. Exploration Stage

PT Irja Eastern Gold Fakfak, Paniai /
Mineral (suspended) Papua

PT Newcrest Nusa Gold Toli/toli, Bolaang
Sulawesi (suspended) Mongondow/N. Sulawesi
 & Gorontalo

PT Wula Aceh Mineral Gold Nagroe Aceh
(suspended)

PT BHP Sumba Mineral Gold Sumba / East Nusa
(suspended) Tenggara

PT Citra Palu Gold Luwu, Palu, Poso /
Minerals (suspended) Central Sulawesi

PT Newmont Horas Gold South/North Tapanuli,
Nauli (being sold) Mandailing, Natal /
 N. Sumatra

PT Ersberg Kalteng Gold Kota Waringin /
Mining C. Kalimantan

PT Iriana Mutiara Gold Jayawijaya / Papua
Idenburg (suspended)

PT Iriana Mutiara Gold Jayapura / Papua
Mining (suspended)

PT Kalimantan Surya Gold Sintang /E.
Kencana Kalimantan; Barito /
 C. Kalimantan

PT Kumamba Mining Gold Jayapura / Papua
(suspended)

PT Kutaraja Copper Gold Wyla Aceh Besar /
Pura (suspended) Nagroe Aceh

PT Pasifik Masro Gold North Barito /
Mineral C. Kelimantan

PT Tambang Tonsdano Gold Minahasa, Bitung /
Nusaraya (suspended) N. Sulawesi

Source: DMCE

Table--4
Mineral reserves and mining concessions of PT Freeport Indonesia

 Mining Copper Copper (Cu)

 Area Ore Cu
 Mill. Tons % Cu (mill Tons)

1. Grasberg 1,909 0.99 19.6
2. Kucing Liar 320 1.41 4.5
3. Deep Ore Zone 181 1.10 2.0
 (DOZ)

 Mining Gold (Au) Silver (Ag)

 Area Au Au
 g/t Au (Tons) g/t Au (Tons)

1. Grasberg 1.20 2,377 2.38 4,715
2. Kucing Liar 1.41 451 5.30 696
3. Deep Ore Zone 0.81 150 5.83 1,028
 (DOZ)

Source: PT Freeport Indonesia

Table--5
Ore reserves and mineral resources ('000 wmt)

 Commodities Ores Change (%)

 2009 2010

Saprolite Nickel 447,700 371,400 -17
Limonite Nickel 498,850 400,300 -20
Gold 8,304 8,672 4
Bauxite 347,200 369,500 6

Source : Antam

Table--6
Proven and available reserves ('000 wmt)

 Ores

 Commodities 2009 2010 Change (%)

Saprolite Nickel 50,350 54,200 8
Limonite Nickel -- -- --
Gold 4,058 4,834 19
Bauxite 104,500 105,700 1

Source : Antam

Proven and inferred reserves of PT INCO 2009-2010

 31 Des 2009 31 Des 2010

 Million % Million %
Reserves tons (content) tons (content)

Proven 82.3 1.84 75.4 1.83
Inferred 38.8 1.70 38.3 1.71
Total 121.1 1.79 113.7 1.78

Source: PT INCO

Table--7
Mineral production by commodities, 2006--2010

Mineral Unit 2006 2007 2008

Copper Concentrate dmt 2.938.009 2.814.952 2.397.899
Copper tons 817.796 796.899 655.046
Gold kg 85.411 117.854 64.390
Silver kg 261.398 268.967 226.051
Tin Concentrate tons 80.933 66.137 53.228
Tin Metal tons 65.357 64.127 53.471
Bauxite mt 1.501.937 1.251.147 1.152.322
Converter matte tons 92.123 98.914 92.776
Ni + Co in matte tons 72.782 77.928 73.356
Nickel Ore wmt 4.353.832 7.112.870 6.571.764
Ferro nickel mt -- -- --
Ni In Fe Ni tons 14.474 18.532 17.566
Iron Sand wmt 5.489 -- --
Granite tons 5.217.807 1.793.440 --
Diamond crt 46.856 22.980 27.688

Mineral 2009 2010

Copper Concentrate 3.484.124 3.466.771
Copper 998.530 878.376
Gold 127.716 104.600
Silver 326.773 271.534
Tin Concentrate 46.078 43.258
Tin Metal 51.418 43.832
Bauxite 783.097 104.692
Converter matte 85.974 97.387
Ni + Co in matte 68.228 77.186
Nickel Ore 5.802.080 5.432.812
Ferro nickel -- --
Ni In Fe Ni 12.550 14.277
Iron Sand -- --
Granite -- --
Diamond -- --

Notes: Wmt = wet metric tons; dmt = dry metric tons

Sources: Directorate of mineral and coal management (DMCE)

Table--8
Gold production by companies, 2006-2010

(Kg)

 Company 2006 2007 2008

PT Antam 2,873 2,791 2,834
PT Freeport Indonesia 57,268 82,685 37,257
PT Indo Muro Kencana 1,270 1,422 1,610
PT Newmont Nusa Tenggara 13,926 17,053 8,369
PT Nusa Halmahera Minerals 8,526 11,660 12,957
PT Avocet Bolaang Mongondouw 1,512 2,226 1,348
PT Galuh Cempaka 37 17 15
 Total 82,539 117,854 64,390
 Growth (%) -- 42.8 -45.4

 Company 2009 2010

PT Antam 2,627 2,099
PT Freeport Indonesia 94,586 61,833
PT Indo Muro Kencana 1,168 1,273
PT Newmont Nusa Tenggara 17,406 22,930
PT Nusa Halmahera Minerals 10,434 15,122
PT Avocet Bolaang Mongondouw 1,496 1,343
PT Galuh Cempaka -- --
 Total 127,717 104,600
 Growth (%) 98.3 -18.1

Source: DMCE--MEMR

Source: Directorate of Mineral and Coal Management (DMCE)

Table--9
Production of Copper Concentrate and Cooper Metal by Companies
2006-2010
(Tons)

 Company 2006 2007 2008

Copper Concentrate (dmt)
1, Freeport Indonesia 2,223,678 2,025,388 1,900,927
2, Newmont Nusa Tenggara 714,331 789,564 496,972
 Total 2,938,009 2,814,952 2,397,899
 Growth (%) -- -4,2 -14,8

Copper Metal (tons)
1, Freeport Indonesia 612,018 577,287 526,014
2, Newmont Nusa Tenggara 205,778 219,612 129,032
 Total 817,796 796,899 655,046
 Growth (%) -- -2,6 -17,8

 Company 2009 2010

Copper Concentrate (dmt)
1, Freeport Indonesia 2,731,769 2,575,006
2, Newmont Nusa Tenggara 752,355 891,765
 Total 3,484,124 3,466,771
 Growth (%) 45,3 -0,5

Copper Metal (tons)
1, Freeport Indonesia 774,661 632,325
2, Newmont Nusa Tenggara 223,869 246,051
 Total 998,530 878,376
 Growth (%) 52,4 -12,0

Source: DMCE--MEMR

Notes: Wmt = wet metric tons; dmt = dry metric tons

Table--10
Tin production by companies, 2006-2010
(Tons)

Companies Products 2006 2007 2008

PT Timah Tbk Tin concentrate 51,818 58,086 47,074
 Tin metal 44,637 58,325 49,028

PT Koba Tin Tin concentrate 29,115 8,051 6,154
 Tin metal 20,720 5,802 4,443

Total Tin concentrate 80,933 66,137 53,228
 Tin metal 65,357 64,127 53,471

Companies Products 2009 2010

PT Timah Tbk Tin concentrate 37,701 35,535
 Tin metal 45,325 38,216

PT Koba Tin Tin concentrate 8,377 7,723
 Tin metal 6,094 5,616

Total Tin concentrate 46,078 43,258
 Tin metal 51,419 43,832

Notes: PT Gunung Kikara Mining not operating since 1994

Source: DMCE--MEMR

Table--11
Nickel production by companies, 2006-2010

 Company 2006 2007 2008

1. PT ANTAM
Nickel ore (wmt) 4,353,832 7,112,870 6,571,764
Ferro Nickel (mt) -- -- --
Ni-in Ferronickel (tons) 14,474 18,532 17,566

2. PT INCO
Converter matte (tons) 92,123 98,914 92,776
Ni+Co in matte (tons) 72,782 77,928 73,356

 Company 2009 2010

1. PT ANTAM
Nickel ore (wmt) 5,802,080 5,432,812
Ferro Nickel (mt) -- --
Ni-in Ferronickel (tons) 12,550 14,277

2. PT INCO
Converter matte (tons) 85,974 97,387
Ni+Co in matte (tons) 68,228 77,186

Sources: DMCE--MEMR

Table--12
Production Metal Minerals by Companies, 2006--2010

N0. Companies Units 2006 2007 2008

1 PT Aneka Tambang Tbk
 Nickel Ore Wmt 4,353,832 7,112,870 6,571,764
 --Ni-Lg Wmt 859,871 348,440 2,544,244
 --Ni-Hg Wmt 3,493,961 6,764,430 4,027,520
 Ferro nickel Mt -- -- --
 Ni in Fe Ni Tons 14,474 18,532 17,566
 Gold Kg 2,873 2,791 2,834
 Silver Kg 23,876 24,125 25,349
 Bauxite Mt 1,501,937 1,251,147 1,152,322
 Iron sand Mmt 5,489 -- --

2 PT Timah Tbk
 Tin conct. Tons 51,818 58,086 47,074
 Tin metal Tons 44,637 58,325 49,028

3 PT Freeport Indonesia
 Copper conct. Dmt 2,223,678 2,025,388 1,900,927
 Copper Tons 612,018 577,287 526,014
 Gold Kg 57,268 82,685 37,257
 Silver Kg 167,931 163,698 141,417

4 PT Koba Tin
 Tin conct. Tons 29,115 8,051 6,154
 Tin metal Tons 20,720 5,802 4,443

5 PT International Nickel Indonesia
 Conv matte Tons 92,123 98,914 92,776
 Ni+Co in matte Tons 72,782 77,928 73,356

6 PT Karimun Granite
 Granite Tons 5,217,807 1,793,440 --

7 PT Indo Muro Kencana
 Dore bullion kg 9,509 12,578 9,796
 Gold kg 1,270 1,422 1,610
 Silver kg 8,998 10,882 8,186

8 PT Newmont Nusa Tenggara
 Copper conct. dmt 714,331 789,564 496,972
 Copper tons 205,778 219,612 129,032
 Gold kg 13,926 17,053 8,369
 Silver kg 50,429 57,009 36,546

9 PT Nusa Halmahera Minerals
 Dore bullion kg 19,433 26,296 29,344
 Gold kg 8,526 11,660 12,957
 Silver kg 9,814 13,068 14,395

10 Avocet Bolaang Mongondouw
 Dore bullion kg 1,925 2,625 1,597
 Gold kg 1,512 2,226 1,348
 Silver kg 350 185 158

11 PT Galuh Cempaka
 Diamond crt 46,856 22,980 27,688
 Gold kg 37 17 15

NO. Companies 2009 2010

1 PT Aneka Tambang Tbk
 Nickel Ore 5,802,080 5,432,812
 --Ni-Lg 2,459,409 2,726,433
 --Ni-Hg 3,342,671 2,706,379
 Ferro nickel -- --
 Ni in Fe Ni 12,550 14,277
 Gold 2,627 2,099
 Silver 22,589 13,652
 Bauxite 811.341 104,692
 Iron sand -- --

2 PT Timah Tbk
 Tin conct. 37,701 35,535
 Tin metal 45,325 38,216

3 PT Freeport Indonesia
 Copper conct. 2,731,769 2,575,006
 Copper 774,661 632,325
 Gold 94,586 61,833
 Silver 227,406 172,778

4 PT Koba Tin
 Tin conct. 8,377 7,723
 Tin metal 6,094 5,616

5 PT International Nickel Indonesia
 Conv matte 85,974 97,387
 Ni+Co in matte 68,228 77,186

6 PT Karimun Granite
 Granite -- --

7 PT Indo Muro Kencana
 Dore bullion 7,808 3,378
 Gold 1,168 1,273
 Silver 6,643 2,104

8 PT Newmont Nusa Tenggara
 Copper conct. 752,355 891,765
 Copper 223,869 246,051
 Gold 17,406 22,930
 Silver 61,166 73,899

9 PT Nusa Halmahera Minerals
 Dore bullion 23,869 28,039
 Gold 10,434 15,122
 Silver 8,705 8,654

10 Avocet Bolaang Mongondouw
 Dore bullion 1,128 1,824
 Gold 1,496 1,343
 Silver 264 448

11 PT Galuh Cempaka
 Diamond -- --
 Gold -- --

Sources: ESDM

Table--13
Production of minerals by provinces 2006-2010

No. Provinces Units 2006 2007 2008

 Papua
 PT Freeport Indonesia
 Copper conct. dmt 2,223,678 2,025,388 1,900,927
 Copper tons 612,018 577,287 526,014
 Gold kg 57,268 82,685 37,257
 Silver kg 167,931 163,698 141,417

2 Southeast Sulawesi
 PT Aneka Tambang Tbk
 Nickel ore wmt 1,486,442 2,499,935 6,571,764
 Ferro nickel mt -- -- --
 Ni In Fe Ni tons 14,474 18,532 17,566

3 South Sulawesi
 PT International Nickel Indonesia
 Conv matte tons 92,123 98,914 92,776
 Ni+Co in matte tons 72,782 77,928 73,356

 PT Indo Muro
 Kencana
 Dore bullion kg 9,509 12,578 9,796
 Gold kg 1,270 1,422 1,610
 Silver kg 8,998 10,882 8,186

8 West Nusa Tenggara
 PT Newmont Nusa Tenggara
 Copper conct. dmt 714,331 789,564 496,972
 Copper tons 205,778 219,612 129,032
 Gold kg 13,926 17,053 8,369
 Silver kg 50,429 57,009 36,546

9 North Maluku
 PT Aneka Tambang Tbk
 --Ni-Lg wmt -- 48,453 --
 --Ni-Hg wmt -- -- --

 PT Nusa Halmahera Minerals
 Dore bullion kg 19,433 26,296 29,344
 Gold kg 8,526 11,660 12,957
 Silver kg 9,814 13,068 14,395

12 West Java
 PT Aneka Tambang Tbk
 Gold kg 2,873 2,791 2,834
 Silver kg 23,876 24,125 25,349

13 Bangka Belitung
 PT Timah Tbk
 Tin conct. tons 51,818 58,086 47,074
 Tin metal tons 44,637 58,325 49,028

 PT Koba Tin
 Tin conct. tons 29,115 8,051 6,154
 Tin metal tons 20,720 5,802 4,443

16 Riau
 PT Aneka Tambang Tbk
 Bauxite mt 1,501,937 1,251,147 1,152,322

 PT Karimun Granite
 Granite tons 5,217,807 1,793,440 --

No. Provinces 2009 2010

 Papua
 PT Freeport Indonesia
 Copper conct. 2,731,769 2,575,006
 Copper 774,661 632,325
 Gold 94,586 61,833
 Silver 227,406 172,778

2 Southeast Sulawesi
 PT Aneka Tambang Tbk
 Nickel ore 5,802,080 6,993,455
 Ferro nickel -- --
 Ni In Fe Ni 12,550 14,277

3 South Sulawesi
 PT International Nickel Indonesia
 Conv matte 85,974 97,387
 Ni+Co in matte 68,228 77,186

 PT Indo Muro
 Kencana
 Dore bullion 7,808 3,378
 Gold 1,168 1,273
 Silver 6,643 2,104

8 West Nusa Tenggara
 PT Newmont Nusa Tenggara
 Copper conct. 752,355 891,765
 Copper 223,869 246,051
 Gold 17,406 22,930
 Silver 61,166 73,899

9 North Maluku
 PT Aneka Tambang Tbk
 --Ni-Lg -- --
 --Ni-Hg -- --

 PT Nusa Halmahera Minerals
 Dore bullion 23,869 28,039
 Gold 10,434 15,122
 Silver 8,705 8,654

12 West Java
 PT Aneka Tambang Tbk
 Gold 2,627 2,099
 Silver 22,589 13,652

13 Bangka Belitung
 PT Timah Tbk
 Tin conct. 37,701 35,535
 Tin metal 45,325 38,216

 PT Koba Tin
 Tin conct. 8,377 7,723
 Tin metal 6,094 5,616

16 Riau
 PT Aneka Tambang Tbk
 Bauxite 783,097 104,692 1

 PT Karimun Granite
 Granite -- --

Sources: ESDM

Table--14
Sales of minerals on domestic market by commodities, 2006-2010

No. Commodities Units 2006 2007 2008

1 Copper tons -- -- 216,761
2 Gold kg 1,882 -- 15,216
3 Silver kg 12,967 -- 58,392
4 Tin metal tons 1,927 -- 747
5 Bauxite mt -- -- --
6 Ni+Co in matte tons -- -- --
7 Nickel ore wmt -- -- --
8 Ferro nickel mt -- -- --
9 Ni In Fe Ni tons -- -- --
10 Iron sand wmt 6,051 -- --

No. Commodities 2009 2010

1 Copper 240,782 227,812
2 Gold 29,776 22,054
3 Silver 70,397 62,804
4 Tin metal -- --
5 Bauxite -- --
6 Ni+Co in matte -- --
7 Nickel ore -- --
8 Ferro nickel -- --
9 Ni In Fe Ni -- --
10 Iron sand -- --

Source : ESDM

Table--15
Exports of minerals by commodities, 2006-2010

No. Commodities Units 2006 2007 2008

1 Copper tons 816,181 785,552 450,661
2 Gold kg 85,176 119,637 57,475
3 Silver kg 244,144 268,051 172,484
4 Tin metal tons 61,422 63,679 50,198
5 Bauxite mt 1,536,542 964,282 893,088
6 Ni+Co in matte tons 72,879 77,838 74,030
7 Nickel ore wmt 4,309,134 6,907,459 5,342,924
8 Ferro nickel mt -- -- --
9 Ni In Fe Ni tons 13,389 17,548 17,025
10 Iron sand wmt -- -- --

No. Commodities 2009 2010

1 Copper 698,190 597,231
2 Gold 102,081 78,644
3 Silver 303,346 206,829
4 Tin metal 55,355 45.962
5 Bauxite 445,662 164,498
6 Ni+Co in matte 67,782 77,035
7 Nickel ore 4,901,699 4,563,371
8 Ferro nickel -- --
9 Ni In Fe Ni 14,191 16,590
10 Iron sand -- --

Source: DMCE

Table--16
Gold exports by producing companies, 2006-2010

(Kg)

No. Companies 2006 2007 2008

1 PT Antam 1,458 5,000 9,441
2 PT Freeport Indonesia 58,287 83,857 22,146
3 PT Indo Muro Kencana 1,341 1,314 1,590
4 PT Newmont Nusa Tenggara 13,849 15,704 9,522
5 PT Nusa Halmahera Minerals 8,665 11,557 13,331
 Total 83,600 117,432 56,030
 Growth (%)

No. Companies 2009 2010

1 PT Antam 12,893 4,499
2 PT Freeport Indonesia 63,758 37,417
3 PT Indo Muro Kencana 1,178 1,280
4 PT Newmont Nusa Tenggara 12,957 19,279
5 PT Nusa Halmahera Minerals 9,785 14,805
 Total 100,571 77,280
 Growth (%)

Notes: The following companies are no longer exporting gold:

1. PT Prima Lirang Mining since 1998

2. PT Barisan Tropical Mining since 2000

3. PT Lusang Mining

4. PT Ampalit Mas Perdana

5. PT Monterado Mas Mining

6. PT. Newmont Minahasa Raya

7. PT. Kelian Equatorial Mining

Source: DMCE--MEMR

Table--17
Nickel exports by companies, 2006-2010

(Kg)

 Company Unit 2006 2007 2008

 PT ANTAM
Nickel ore wmt 4.309.134 6.907.459 5.342.924
Ferronickel mt -- -- --
Ni-in Ferronickel tons 13.389 17.548 17.025

 PT INCO
Ni+Co in matte tons 72.879 77.838 74.030

 Company 2009 2010

 PT ANTAM
Nickel ore 4.901.699 4.563.371
Ferronickel -- --
Ni-in Ferronickel 14.191 16.590

 PT INCO
Ni+Co in matte 67.782 77.035

Sources: DMCE--MEMR

Table--18
Tin exports by companies, 2006-2010

(Tons)

Companies 2006 2007 2008 2009 2010

PT Timah Tbk 40,684 57,897 45,771 49,240 40,507
PT Koba Tin 20,738 5,782 4,427 6,115 5,455
Total 61,422 63,679 50,198 55,355 45,962
Growth (%)

Sources: DMCE--MEMR, PT Timah Tbk

Table--19
Tin exports in March by countries of destination

Countries Volume (tons) Value (US$)

Singapore 7,305.11 210,468 million
Malaysia 813.88 23,515 million
Japan 304.64 9,514 Million
Taiwan 234.88 7,001 million
South Korea 131.4 3,809 million
Turkey 97.61 2,625 million
United States 49.53 1,479 million
India 49.22 1,497 million
Thailand 43.20 1,397 million
Australia 20.11 634,000
Total 9,051.46 261,943 million

Source: ESDM

Table--20
Consumers of products of metal minerals of PT Antam

 Products Customers Countries

Nickel ores Pacific Metal Co.Ltd. (PAMCO) Japan
 Sumitomo Metal Mining Co. Ltd (SUMICO) Japan
 Nippon Yakin Kogyo Co. Ltd Japan
 Raznoimport Nickel (UK) Limited Europe
 Avarus AG Europe
 Minsources International China

Ferronickel Pohang Iron & Steel (POSCO) South Korea
 Thyssen Krupp Nirosta GmbH Europe
 Arcelor Mittal Europe
 Outokumpu Stainless Europe

Gold and Standard Bank Plc Singapore
silver Jewelry producers Indonesia

Bauxite Showa Denko K.K. Japan
 Zhong Nan Group Industry Company Limited China

Source: PT Antam Tbk

Table--21
Market destinations of tin production of PT Timah Tbk

 Markets Unit 2008 2009

Domestic M tons 1,267 1,324
Asia M tons 27,966 32,543
Europe M tons 16,595 12,318
America M tons 610 3,055

Source: PT Timah
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Title Annotation:INDUSTRY PROFILE
Publication:Indonesian Commercial Newsletter
Geographic Code:9JAPA
Date:Feb 1, 2011
Words:9658
Previous Article:Indonesia's macro economy expanding in 2011.
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