Aug 19 Indonesian oil and gas producer PT Medco Energi Internasional Tbk plans to invest $500 million to build a copper smelter following its deal to buy control of Newmont Nusa Tenggara (NNT), its president commissioner told Reuters.
The smelter, which will have an annual capacity of 500,000 tonnes, is expected to start operations in 2021, Muhammad Lutfi said in an interview. Part of the funds to build the smelter will come from bank loans, Lutfi said.
A consortium consisting of oil and gas tycoon Arifin Panigoro, who founded Medco, and banker Agus Projosasmito announced in late June that it will spend $2.6 billion to buy 82.2 percent of NNT, which operates Indonesia’s second-biggest copper and gold mine.
The Indonesian group is buying 56 percent of NNT from U.S. miner Newmont Mining Corp and Japan’s Sumitomo Corp and its partners. It will buy the remaining 26.2 percent from local companies.
The Jakarta-listed Medco, which will own at least 50 percent of NNT, is targeting a 25 percent increase in copper concentrate production at the mine to 500,000 tonnes by 2019, Lutfi said.
Copper and gold may contribute 30-50 percent to Medco’s revenue in future as part of its diversification, Lutfi said, adding that the company is planning to sell its products mainly to the domestic automotive, electronics and cable industries.
Oil and gas will nevertheless remain a core business for Medco, which is currently exploring the acquisition of offshore oil and gas blocks in Indonesia, Lutfi said. (Reporting by Wilda Asmarini and Eveline Danubrata; Editing by Tom Hogue)
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