JAKARTA – PT Indika Energy Tbk (INDY) is still grappling with challenges in its non-coal business diversification as of the first nine months (9M) of 2024. The divestment of PT Multi Tambang Jaya Utama (MUTU) and a decline in coal prices have caused INDY’s revenue to drop 22.4% year-on-year (yoy) in 9M 2024.

As part of its strategy to expand into non-coal sectors, INDY has been investing in PT Masmindo Dwi Area, the operator of the Awakmas gold mine in South Sulawesi.

Management revealed that INDY has poured USD 238.9 million into Awakmas as of September 2024, with total investment expected to reach USD 429 million by 2026.

Acquired by INDY in October 2021, the Awakmas mine holds reserves of 1.5 million ounces of gold, with the potential to generate over $3 billion in revenue over its operational lifespan, assuming a stable gold price of USD 2,000 per ounce.

Management has allocated its largest capital expenditure to Awakmas in 2024, amounting to USD 192.6 million—72% of the company’s total capital expenditure of $267.7 million for the year. However, production at the mine is only expected to commence in the second half of 2026.

The absence of MUTU’s contribution creates a significant revenue gap, which INDY acknowledges is challenging to fill without large-scale ventures, typically in industries like mineral mining and infrastructure.

“Our hopes lie with the logistics and energy infrastructure segments, particularly Tripatra, whose revenue can help bridge the gap before 2026,” said Azis Armand, Vice President Director and Group CEO of INDY, during Public Expose today (20/11).

“Tripatra, as an EPC service provider, is developing new competencies to expand its reach. Over the next one to two years, we expect contributions from Tripatra and the energy infrastructure segment,” Armand elaborated.

In addition to its gold mining initiatives, INDY has recently completed the acquisition of Natura Aromatik, a producer of essential oils, in January 2024. The transaction required an investment of USD 13.6 million.

“We see great potential in this sector. Indonesia is the world’s fourth-largest exporter of essential oils and extracts,” Armand added. (ZH)