DEVELOPING NICKEL BASED INDUSTRY

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3rd Asian Nickel Conference

Jakarta 22 September 2015

R. Sukhyar

Indonesia Smelter and Mineral Processing Association

(ISPA)

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C Isi

CONTENT

I. Background

II. Current Condition

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All the minerals are present in Indonesia

Base Metals Cu, Zu, Ni, Al, Sn

Source: Manuel Regueiro Y Gonzalez-Barros Geological Survey of Spain

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Declining share values of mining companies

Slide 4

Sejak Maret 2015, Indeks Harga Saham Gabungan, termasuk saham-saham berbasis pertambangan dan komoditas, mengalami penurunan sebagai dampak dari penguatan Dolar Amerika Serikat (“DAS”) yang merupakan imbas dari persepsi penguatan perekonomian Amerika Serikat, defisit neraca berjalan dan anggaran Pemerintah Indonesia serta tingginya tingkat hutang Indonesia yang didominasi dalam DAS.

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Volatility of Ni and Au price, and PT Antam share

Slide 5

Selain risiko terkait market saham di Indonesia, harga saham ANTAM dibayang-bayangi juga oleh potensi penurunan harga komoditas nikel dan emas. Harga nikel mengalami penurunan menjadi US$4,3 akibat melemahnya permintaan seiring dengan penurunan perekonomian Tiongkok, selain itu harga emas masih memiliki potensi menurun seiring ditundanya keputusan untuk menaikkan suku bunga acuan oleh Bank Sentral Amerika Serikat.

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Despite recent underperformance, nickel has been one of the better performing industrial metals

since the start of 2014

50 60 70 80 90 100 110 120 130 140 150 160 Nov Sep May

Mar Jul Jan

Jan NICKEL COPPER pct of Jan 1 2014 Price ALUMINUM ZINC TIN LEAD 50 60 70 80 90 100 110 120 130 140 150 160 Nov Sep Jan Jul Jan Mar May

pct of Jan Price

2014

2013 Daily Nickel Price in 2013 and 2014 as a % of Jan 1 Price

Daily Commodity Price in 2014 as a % of Jan 1 Price

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Lifting of the ore export ban would likely remove the motivation for

development in Indonesia

Source: Macquarie April 2015

Indonesian ore stocks declined by >70% since the start of 2014

o

Indonesian ore stockpiles have

declined significantly since

start of 2014

o

Correspondingly, NPI

Production has declined as well

o

Investment in Indonesia is

largely premised in declining

NPI production and the need

for production to shift to

Indonesia

o

The re-introduction of

Indonesian ore removes this

urgency

105 95 106 115 125 135 145 130 116 120 97 86 93 90 74 78 45 37 46 38 49 36 1Q2010 1Q2014 2Q2015

Quarterly Chinese NPI Production (kt Ni)

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Metalogenic belt of Indonesia (simplified map)

Badan Geologi, 2012

Al

Ni

Sn

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Stage of Exploitation of mineral producing countries

 World class reserve:

• Cu/Au (Grasberg dan Batu Hijau)

• Au, beberapa KK

• Nickel (PT. Inco & PT. Antam, IUPs)

• Tin (PT. Timah)

• Coal (PTBA dan PKPB Gen I)

• Timah No. 2, produser, ekspor no 1

• Batubara No.1, eksportir

• Tembaga No. 3, produser

• Nikel No.3 Maturity 0 10 20 30 40 50 60 70 80 90 100 Exploration Success Limited Mining Project Development Sustained Exploration & Mining Development & Take-overActivity Extensions to Mines, New replacement mines, Exploration Spending Moves offshore

Infant Stage

_{Mature Stage}

West Africa Brazil Philippines Colombia CIS Indonesia Argentina Peru Mexico Chile Australia PNG South Africa United States Canada

Extensive New Mine

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1. Ore minerals may contain more than important metals :

- NI Laterite: main metals: Ni, Fe and associate metals: Co dan Cr.

- Bauxite : Al, possible minor Ga dan Sc .

- Tin ore : Sn and associate metals: W, Nb, Ta dan Sb, dan REE, U dan Th

- Iron sands : Fe dan Ti serta minor V

- Copper ore : Cu, Au, Ag, minor Pt, Pb, CuTe dan REE

- Lead ore : Pb, Zn dan minor Ag dan Au

2. Technology selection is important in the extraction of the metals

Metals ini Ore Minerals in Indonesia

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1. Refined Ni comes from

- PT Vale

- PT Aneka Tambang

- PT Indoferro

- PT Bintang Delapan

- PT Cahaya Modern

2. Many others are in the progress of construction

3. Real Investment since the issuance of Law No 4/2009 counts for 2,4 billion dolars.

Current status of Ni processing development

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PKP2B = 75 KK = 41

IUP mineral logam = 4.474

IUP non logam & batuan = 2.526 IUP Batubara = 3.922

P. SUMATERA

KK : 10 PKP2B : 15

IUP logam : 1,500

IUP non logam&batuan : 545 IUP batubara : 992

P. KALIMANTAN (most Al, Au/Cu)

KK : 9 PKP2B : 60 IUP logam : 737

IUP non logam&batuan : 414 IUP batubara : 2.687

P. SULAWESI (most Ni, Au/Cu)

KK : 10

IUP logam : 1.076 IUP non logam &batuan : 393 IUP batubara : 106

P. PAPUA (most Cu, Au)

KK : 7

IUP logam : 112

IUP non logam &batuan : 7 IUP batubara : 119

KEP.MALUKU

KK : 2

IUP logam : 401 IUP non logam &batuan : 23 IUP batubara : 12

P. BALI DAN NUSA TENGGARA

KK : 2

IUP logam : 341

IUP non logam&batuan : 124 IUP batubara : 1

P.JAWA

KK : 1

IUP logam : 307

IUP non logam&batuan : 1,020 IUP batubara : 7

Total IUP : 10.922

Sumber Data : Ditjen Minerba, 2014

Current mining licenses in Indonesia

Ni

Al

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NO PROGRES (%) CAPAIAN KEGIATAN JUMLAH IUP (Jan 2015) JUMLAH IUP (Mar 2015)

1. 0 –5 Progres mencapai Studi

Kelayakan 97 97 2. 6 –10 Progres mencapai AMDAL 12 12 3. 11 - 30 Progres mencapai

Ground Breaking dan Awal Konstruksi Pabrik

19 21

4. 31-50 Progres mencapai Pertengahan Tahap Konstruksi Pabrik

17 14

5. 51-80 Progres mencapai Akhir Tahap Konstruksi

8 6

6. 81-100 Progres mencapai tahap commissioning/Produksi 25 27

IV. St

NO KOMODITAS JUMLAH IUP JUMLAH FAS. PENGOLAHAN /PEMURNIAN 1. Nikel 40 35 2. Bauksit 10 7 3. Besi 8 8 4. Mangan 3 3 5. Zirkon 13 11 6. Timbal dan Seng 2 2 7. Kaolin dan Zeolit 4 4 Total 80 70

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2015

Refined Ni Producing companies, construction completed and nearly completed, Excluding existing Vale and Aneka Tambang

No Nama Perusahaan Kapasitas Input (tpy) Volume Produk (tpy) Nilai Ekspor Bijih

(USD)

Nilai Ekspor Logam (USD)

1 PT. Indoferro 1.500.000 250.000 NPI 47,385,000 297.500.000

2 PT. Cahaya Modern 48.000 8.640 NPI 1,516,320 10.281.600

3 PT Sambas Mineral Mining 180.000 12.000 FeNi

(25 % Ni) 5,686,200 39.900.000

4 PT Macika Mineral Industri 290.000 53.000 FeNi

(10 %Ni) 9,161,100 70.490.000

5 PT Karyatama Konawe Utara 250.000 50.000 NPI

(8-10% Ni) 7,897,500 59.500.000

6 PT Bintang Delapan 1.600.000 300.000 NPI

(10 -15 % Ni) 50,544,000 357.000.000

7

PT Fajar Bhakti Lintas

Nusantara 500.000 300.000 100.000 FeNi (10-16 % Ni) 6000 ingot Ni 25.000.000 215.000 PT Gebe Sentra Nikel

8 PT Adiguna 150.000.000 20.000 NPI 3.000.000 7.000.000

9 PT. Antam (ekspansi) 800.000 10.000 FeNi (30% Ni) 25,272,000 33.000.000

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Progress of Smelter > 30%

No Komoditas Nama perusahaan Nilai Ekspor Bijih

(USD)

Nilai Ekspor Logam (USD)

1 Nikel Bintang Delapan Mineral IUPOPK 50,544,000 357,000,000 Bintang Delapan Energi

2 Nikel Gebe Industri Nikel IUPOPK 9,477,000 81,690,000 3 Nikel Integra Mining Nusantara 3,411,720 24,990,000 4 Nikel PT. Macika Mada Madana 9,161,100 70.490,000 5 Nikel Fajar Bhakti Lintas Nusantara 15,795,000 133,000,000

Gebe Sentra Nikel

6 Nikel PT Karyatama Konawe Utara 7,897,500 59,500,000 7 Nikel Bhineka Sekarsa Adidaya 47,385,000 357,000,000 8 Nikel PT. Cipta Djaya Surya 120,042,000 833,000,000 9 Nikel Pernick Sultra, PT 11,372,400 4,284,000 10 Nikel Elit Kharisma Utama 1,421,550 8,925,000

Nikel Konawe Nikel Nusantara

11 Nikel Kembar Emas Sultra 8,845,200 46,550,000 12 Nikel PT. Bima Cakra Perkasa Mineralindo 110,565,000 246,050,000 13 Nikel PT. PAM METALINDO IUPOPK 75,816,000 219,450,000 14 Nikel Aneka Tambang-FeNi Haltim 78,975,000 132,000,000 15 Nikel Wanatiara Persada (Multi Baja Industri) 25,272,000 146,300,000

Nikel Rimba Kurnia Alam (Multi Baja Industri)

16 Nikel PT. Antam (ekspansi) 25,272,000 33,000,000 17 Nikel PT. Cahaya Modern 1,516,320 10,281,600 18 Bauksit PT. Harita Prima Abadi Mineral

(Harita Group & Well Harvest Winning) 51,208,000 230,000,000

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*) pada 2013, nilai ekspor bijih sebesar 3,8 milyar dolar (25%) dari total nilai ekspor. nilai ekspor 2014 turun karena PTFI dan PTNNT tidak ekspor selama 7 bulan.

Bandingkan dengan 2009 ekspor bijih 35 juta dolar (2,7%) dari total nilai ekspor mineral **) Proyeksi nilai ekspor.

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1. The Government will remain consistent in the implementation of the Law of Mineral and Coal Mining, meaning that mineral processing and refining in the country is a must. KADIN (Indonesia Chamber of Commerce, in which is ISPA included) has sent a letter to the Government, that will be committed to help and join together with the Government in the implementation and the acceleration of Ni refinery establishment.

2. The Government is committed to speed up the completion of construction of mineral processing facilities by improving licensing process (one stop service, harmonizing licensing and less time consuming of public services), fiscal policy (tax allowance/tax holday, import tax), facilitating provision of infrastructure, and assurance of sustainable Ni ore supply.

3. Global economy condition has affected declining Ni and other commodities price. However, in term of Ni, it is believed that position of Indonesian Ni is important in influencing volatility of global Ni industry. The consistence of Indonesia in implementing the ore ban policy is believed and hoped that the price will be better in future (but when ?).

4. Progress of Ni smelter in the country is slow but positive (due to challenges of insufficient energy and infrastructure). We can say that business opportunity is wide open to develop Ni industry and other mineral/metal based industries.