PT Merdeka Copper Gold:
mining best practice in Indonesia
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PT Merdeka Copper Gold: Achieving success with the Tujuh Bukit mine WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
RICHARD DEANE
03
w w w.me rde ka c o ppe rgo l d.com /en
PT MERDEKA COPPER GOLD
Colin Moorhead, Executive Director of Merdeka, discusses the success of its Tujuh Bukit mine in Indonesia
T
wo years into the development of a major project, the Tujuh Bukit Project in East Java, Indonesia, mining firm PT Merdeka
Copper Gold has become accustomed to setting an example in the mining sector. 04
With significant work completed on the project, Merdeka has continued to achieve substantial growth and exceed expectations. Having played a major role in the success of the mine during the past few years, Colin Moorhead, Executive Director of Merdeka, has utilised his extensive experience in the industry to oversee one of Indonesia’s most important mines. Having started his early career with Newcrest Mining as a geologist, he worked in a number of different positions in a 30-year stint that included roles such as General Manager Resources & Reserves and Executive General Manager of Minerals. In early 2016, Moorhead became the Vice President Director and CEO of PT Merdeka in addition to being appointed in the honorary role as President of AusIMM – the peak body for Australasian Mining Professionals with approximately 13,000
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members worldwide and a parent body for important codes of practice such as The JORC Code. He then transitioned into his new role as Executive Director of the company in 2018, in addition to assuming the position of Non-Executive Chairman of Finders Resources in August 2018 alongside this role. Moorhead believes such experience has allowed him to better understand the challenge of overseeing key projects with Merdeka. “When I first became involved, Merdeka was very much a new company and it was listed on the w w w.me rde ka c o ppe rgo l d.com /en
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PT MERDEKA COPPER GOLD
“If you benchmarked Tujuh Bukit’s construction and compared it to any other project globally during this period, it would be up there as one of the best. Many projects don’t achieve their expectations early on; this one has exceeded them” 08
— Colin Moorhead, Executive Director of Merdeka
stock exchange with the vision to become an internationally respected, Indonesian owned and operated company. Now, three years later, we’ve constructed and commissioned a new mine and produced over 300,000 ounces of gold.”
BUILDING A SUCCESSFUL MINE Having commenced work on the Tujuh Bukit project three years ago, Moorhead affirms how important the project has been to Merdeka. “We’re mining the epithermal gold cap associated with
CLICK TO WATCH : ‘CORPORATE VIDEO – MERDEKA COPPER GOLD’ 09
a large porphyry system for gold and
With the majority of commissioned
silver. It’s a heap leach operation which
projects struggling to meet such a high
is getting ramped up from 4mn to 8mn
trajectory, Tujuh Bukit comfortably
tonnes per annum,” says Moorhead.
exceeded expectations and produced
“We’re in the process of commissioning
more gold than anticipated, despite
an expanded production capacity that
some early issues in the development
we hope will see us set a record
process. “One of the things that sets
production again this year. It’s a fully
us apart from other gold mines is that
operational mine that is also home to
we don’t have a huge footprint in terms
a potential future mass underground
of waste,” he says. “We manage safety
copper mine. Many of our partners that
and the environment to very high
are supporting this exercise are
standards and I am pleased to say
helping us create a world-class, long
that since commissioning two years
life and sustainable underground mine.”
ago, there hasn’t been a significant w w w.me rde ka c o ppe rgo l d.com /en
Metso Minerals in Indonesia
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Growing together with our customers Metso first commenced operations in Indonesia in 2004 to support the growth of the local mining industry. As part of its continuous efforts to ensure a strong local presence, PT. Metso Minerals Indonesia (PT. MMI) employs more than 70 people and has expanded to include: • a sales and administration office in Jakarta; • a service centre in Surabaya and; • site operations at various key customer locations. At the heart of it all is Metso’s commitment to growing together with our customers in Asia Pacific. The importance of safety Managing safety is never an easy feat. Over the years, PT. MMI has developed a strong safety culture across the working sites by constantly reinforcing, educating and emphasising the safety requirements needed to perform tasks in a safe manner. As a result, it achieved a remarkable feat of having 5000 Lost Time Injury (LTI) free days on 28 January 2019. One of our longest serving employees, Sinta Yunianti, strongly believes in the importance of safety. “People often take safety for granted but to us, the implementation of a strong safety culture is the reason why all of us get to go home to see our parents, spouse and children.” A strong Indonesian presence We place a strong emphasis on driving customer centricity in whatever we do. This means understanding our customers’ needs and their business objectives. Our strong presence and capabilities in Indonesia mean that we are well equipped to work collaboratively and support our customers to deliver these goals. Our sales office in Jakarta allows us to be more responsive with in-country sales and technical support. It has not only given us opportunities to create new relationships, it has also helped strengthen ties with some of our longest customers. Our recent projects have included the installation of screens, crushers, mills, gear replacements at key Indonesian mining operations. Similarly, our service centre in Surabaya aims to maximise our customers’ operational efficiency through maintaining and prolonging the original quality and performance of their equipment. Various customers from Malaysia, Vietnam and Philippines are also supported from this facility. Scott Peterson, Director of Service Operations, is keen to emphasise the need to maintain the quality of our service facilities and capabilities. He said “Our customers get peace of mind
knowing that we constantly strive to improve our service quality and standards. We are delighted that we will have a new service centre in Surabaya scheduled to open in 2020. This will enable us to further enhance the level of support for our customers.” The future With the impending opening of a new service centre, Metso’s commitment and support to the Indonesian mining industry will only continue to develop. Ben Weetman, VP of Metso Minerals Asia Pacific, says ”What we have done in Indonesia is a testament to our continuous efforts to ensure a strong and committed local presence. These are exciting times for us as Metso continues to invest, enable and support all our customers not just in Indonesia, but the whole of the Asia Pacific region. As we drive towards becoming the leading mining OEM and service provider in the region, we will continue to grow and expand our capabilities to meet the needs of our customers.”
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reportable environmental incident. That
worldwide. “If you benchmarked Tujuh
operational readiness didn’t happen
Bukit’s construction and compared it
by accident. It requires a very strategic
to any other project globally during
approach and planning from some
this period, it would be up there as one
experienced people to enable it to work.”
of the best. Many projects don’t
Due to the significant success
achieve their expectations early on;
the Tujuh Bukit mine has sustained,
this one has exceeded it. I think you’d
Moorhead believes that the develop-
have to look pretty hard worldwide to
ment is among the leading projects
find a mine that was built on time, on
E XE CU T I VE PRO FI LE
Colin Moorhead Colin has worked in exploration and mining for 3 decades since graduating from the University of Melbourne with a BSc. (Hons) majoring in geology and geophysics in 1987. Most of his career was spent with Newcrest Mining Limited where amongst other roles he was Chief Geologist for periods at Telfer (WA), Cadia (NSW) and Gosowong (Indonesia) mines before returning to Melbourne as General Manager Technical Services for the Newcrest Group in 2006. In 2008 Colin was appointed Executive General Manager Minerals responsible for global exploration, mining geology, resources and reserves governance and orebody knowledge. In January 2016 Colin was appointed CEO of emerging Indonesian gold producer PT Merdeka Copper Gold, Tbk. Colin is also a Graduate of AICD and a graduate of Harvard Business School, Advanced Management Programme (AMP). Colin was President of AusIMM from 2017-2018 and is currently the Immediate Past President. Colin is involved in numerous AusIMM Board Committees and is currently the Chair of the International Advisory Forum.
w w w.me rde ka c o ppe rgo l d.com /en
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“You’d have to look pretty hard worldwide to find a mine that was built on time, on budget, and exceeded its expectations in its first two years” — Colin Moorhead, Executive Director of Merdeka
budget, and exceeded its expectations
it’s not like that at all. The technology that goes into a modern mine is quite sophisticated and mining has become a leader in the areas of automation, electric vehicles, Big Data and artificial intelligence,” he explains. “If you’re building a 30+ year mine, which hopefully Tujuh Bukit will be, you have to get ahead of the curve. I think mining can be slow to adopt technology because of how mines traditionally operate. Mining investments are capital intensive, and much of the process and technology is locked in up front. It can be very costly and risky to change as technology evolves.” With technology allowing operations
in its first two years. It’s an incredibly
to be conducted more efficiently,
important achievement.”
Moorhead reflects on how his company has adapted its strategy in order to
IMPLEMENTING TECHNOLOGY
digitise. “During my 30-year career,
In the past, mining was often considered
we’ve gone from coloured pencils and
as one of the industries slowest to
graph paper to massive data process-
embrace new technology. However,
ing in a very short period of time.
Moorhead believes that the mentality
You’ve got automated drilling rigs with
is shifting, with digital transformation
live feeds going to people working
redefining the way companies
remotely. We must adapt and adopt
worldwide operate. “The mining sector
new technologies quickly. I don’t think
has got a reputation for being an
we’ll be using diesel equipment in
old-fashioned industry – but in reality,
underground mines soon due to w w w.me rde ka c o ppe rgo l d.com /en
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Suprabakti is proud to supply conveyor idlers and pulleys for the Tujuh Bukit expansion Project. We have invested in the equipment and technology to produce of our products in house to be able to supply the highest quality product. We continue to invest in the technology, robotic welding for idler frame, laser cut, CNC lathe, CNC plate bending and most recently conveyor roller testing equipment to test water and dust ingression.
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“We’ve got a much stronger balance sheet and our market cap has increased from around $500mn to almost a billion” — Colin Moorhead, Executive Director of Merdeka
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potential health risks, I believe you’ll
a project in North Sulawesi called Pani.
find most underground mines in the
“We took over Finders Resources to
world will go electric and I believe that’ll
operate the Wetar Copper Mine in the
probably be using high tech recharge-
Maluku province. We’ve leveraged
able, quick charge batteries to do it.”
our capabilities, both technical and non-technical, to help turn around an
KEY ACQUISITIONS AND INVESTMENTS
underperforming asset. We’re looking
Since Moorhead joined Merdeka, he
at transforming the operation to enable
has overseen important acquisitions
a more profitable organisation and
such as that of Australia-based copper
allow for an exploration which will allow
miner, Finders Resources Limited, and
us to extend the mine life,” says Moor-
an agreement to purchase 66% of
head. “We’ve also just signed a deal for w w w.me rde ka c o ppe rgo l d.com /en
WORKING TOWARDS A SUSTAINABLE FUTURE IN EXPLORATION AND MINING SGC provide concise analysis and solutions in geological and engineering for the resource and minerals industries. Geology and Exploration Extensive global experience and practical solutions in exploration, resource modelling, estimation, independent project audits and reviews.
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the acquisition of Pani which is a similar
refinance at both a corporate and
sort of gold, deposit to the gold cap at
holding company level. “We’ve got a
Tujuh Bukit. It’s historically had a lot of
much stronger balance sheet and our
exploration and some informal mining
market cap has increased from around
and has the potential to be our next
$500mn to almost a billion,” explains
significant gold mine.”
Moorhead. “We’ve made some signifi-
During the next three years, Moor-
cant investments such as the oxide
head highlights how his company will
expansion project which sought to
complete a pre-feasibility study on the
take advantage of the fact that we’ve
Tujuh Bukit underground copper mine
put construction and financing risk
by investing approximately US$100mn.
behind us. We re-optimised the project
“If successful, the mine would be a very
previously constrained by finance and
significant underground copper gold
construction risk resulting in a mine that
mine that would last for more than 25
will produce over 1.2mn ounces of gold
years,” he says. Strong cash flow from
which is a big increase from just under
operations has allowed Merdeka to
900,000 ounces in the original plan.”
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“Our partnerships are absolutely critical because we can’t do it alone” — Colin Moorhead, Executive Director of Merdeka
FORMING KEY PARTNERSHIPS With the importance of establishing and sustaining key partnerships with other companies vital to achieving success, Merdeka has formed alliances with Cohesion Group, Transcontinent, Geoservices, DNX Indonesia, PT Indodrill Indonesia, Spiers Geological Consultants, Metso and Lorax Indonesia. “Our partnerships are absolutely critical because we can’t do this alone. I think those partners supplying goods and services are critical to the success w w w.me rde ka c o ppe rgo l d.com /en
MINERAL DIVISION – GEOASSAY LABORATORY Our current range of mineral / exploration services capabilities include but not limited to the following: • Mineral / Exploration Analysis • Mineral Sands Beneficiation Testwork • Metallurgical Testwork • Geotechnical Testwork • Advanced Mineralogy – XRD / SEM • Acid Rock Drainage Testwork • Metal Analysis • Mine and remote site preparation laboratories Additional services available through PT Geoservices : Coal Testing, Environmental, Exploration, Drilling, Oil & Gas Jakarta Office Jl. Minangkabau Barat No. 34, Jakarta, 12970 Phone : (021) 830 5555, 831 8989 Fax : (021) 831 1454 Email : jktbranch@geoservices.co.id
Bandung Office Jl. Setiabudhi No. 81, Bandung, Jawa Barat, 40153 Phone : (022) 203 1316, 203 5436 Fax : (022) 203 8090 Email : bdgoff@geoservices.co.id
Mineral Laboratory Jl. Industri Selatan II Blok MM1 Jababeka 2, Cikarang, Bekasi, Jawa Barat,17530 Phone : (021) 893 7833-34 Fax : (021) 893 7835 Email : mindiv@geoservices.co.id
“Excellent Services With High Professional Integrity“
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SAFETY PRODUCTIVITY PRIORITY FOLLOWED BY
IS OUR
A MEMBER OF THE
INDODRILL SITE GDE SITE
2012
Year founded
250mn
Indonesian rupiah spent on health care in the community (2017)
1,850+
Approximate number of employees
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of the operation. For example, Lorax is a globally recognised leader in the environmental support of mining operations. When it comes to tasks such as environmental impact statements and data analysis, we couldn’t do it without them. You need professionals and Lorax offer that,” he says. “Indodrill provide a lot of drilling for us and has been fantastic down at Tujuh Bukit. They’ve recently completed six deep directional drill holes for us which were highly technical. Metso provided all of the crushing gear and we duplicated the crusher because we were very w w w.me rde ka c o ppe rgo l d.com /en
PROUD TO BE THE STR ATEGIC PARTNER OF MERDEK A COPPER GOLD I N I M P L E M E N T I N G S U S TA I N A B L E D E V E L O P M E N T I N I N D O N E S I A
T H E M I N E E N V I R O N M E N T C O N S U LT A N T S W W W. L O R A X . C A | I N F O @ L O R A X . C O . I D
OUR CLIENTS LIKE OUR VALUES Openness • Trust and Integrity • Passion for Quality Teamwork • Responsibility for our Actions • Can-do Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism. Better known in the market as PBU we predominantly operate in remote locations across the archipelago with leading Indonesian, Multinational and International clients. Our vast experience can be applied to the most demanding of challenges and we are committed to consistently deliver superior service in the most efficient way, for the benefit of all our stakeholders.
PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com
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happy with all of that gear. Spiers Geological Services does all of our resource estimation and has been a great supporter of us while providing a lot of professionalism.” “Transcontinent is a group which offers logistical support as well as managing the critical supply chain in terms of transport and they’ve been able to do that safely and reliably. Geoservices provides superintending for our gold and silver when it goes to
“If you’re building a 30+ year mine, which hopefully Tujuh Bukit will be, you have to get ahead of the curve” — Colin Moorhead, Executive Director of Merdeka
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PT MERDEKA COPPER GOLD
“We have key plans for the future of the mine and we can’t afford to be complacent” — Colin Moorhead, Executive Director of Merdeka
the Tujuh Bukit mine, Moorhead points to how important it is that his company remain focused on the task at hand in order to ensure the mine continues its success. “We have key plans for the future of the mine and we can’t afford to be complacent. This year, we’re in the process of securing a large fleet and transitioning from a client of a contractor to an owner. It’s important to remember to develop people, systems and processes in order to do that successfully. You can’t afford production to drop off during that transition,” explains Moorhead.
the mint. They also provide metallurgical
“I would like to see the Tujuh Bukit mine
test work and assign services for us and
continue to grow from strength to
we consider them a critical supplier in
strength as we ramp it up to 8mn
the chain,” he says. “DNX provide not
tonnes per annum. In a few years’ time,
only the materials but the technology
we could have two or three operating
and the expertise to help us with
gold mines, an operating copper
blasting operations safely and efficiently
mine, and a major underground project
and to improve over time. They’re some
development on our hands which
great examples of people who have
would make us a very significant
brought lots of aid to the table and we
company worldwide in copper and
really appreciate working with people
gold. I want us to become a modern,
we can trust.”
sustainable, innovative and respected Indonesian mining company.”
FUTURE PLANS With high ambitions for the future of w w w.me rde ka c o ppe rgo l d.com /en
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PT Merdeka Copper Gold Gedung, The Convergence Indonesia, 20th Floor Jl. H.R. Rasuna Said Karet Kuningan, Setiabudi Jakarta 12940, Indonesia T +62 21 2988 0393 www.merdekacoppergold.com/en