JAKARTA – Annual General Meeting of Shareholders (AGMS) of PT Harum Energy Tbk (HRUM) today (7/6) agreed not to distribute dividend for the fiscal year (FY) 2023, ending its 3-year streak of dividend distribution since 2021.

According to Annual Public Expose 2024 of HRUM today (7/6), this decision was made after considering the company’s plan to focus its entire capital to its latest investment project in nickel sector through PT Blue Sparkling Energy (BSE).

“There is a need in cash in the company for 2024 and the future in regard to investment and new projects that we handle,” said Ray Gunara, President Director of HRUM.

HRUM is known to have acquired BSE by 51% as of Q1 2024, and is said to have spent capital of up to USD 400 million.

Gunara further mentioned that BSE will establish a nickel smelting facility equipped with HPAL (High Pressure Acid Leaching) technology to produce MHP, which is projected to operate commercially in Q1 2026.

As is known, HRUM has been busy with ventures to boost its performance in the nickel sector instead of coals. Out of USD 687 million of capital expenditure budgeted for 2024, 95% will be allocated to nickel business expansion, while another 5% will be channelled to coal business line.

In addition to its participation in nickel mining business through acquiring 51% of PT Position, until Q1 2024, HRUM is known to have launched nickel product diversification initiatives.

The company then takes over 100% of PT Infei Metal Industry (IMI), 80.7% of PT Westrong Metal Industry (WMI), and 51% of BSE. Those three are companies that manage nickel smelting facility located in Weda Bay Industrial Park.

For the record, WMI manages a nickel smelting plant that produces high-grade nickel matte since its initial operation in March 2024.

“The target is, after 6 months, we expect the production capacity of WMI to reach over 85%. So, by the end of this year, the production capacity reaches 85% of installed capacity,” added Gunara.

In order to support this nickel business line, the company is revealed to have conducted several explorations to enhance the production in existing and operating smelters.

“It is indeed the company’s vision to expand our nickel resources, although we have yet to identify a specific target company,” said Gunara.

However, in terms of nickel refining segment, the company claims of not having any further plans yet.

“We focus on finishing projects, including smelter of BSE with HPAL, as well as focusing on finishing investment in BSE and WMI,” added Gunara.

Based on its segments, coals generated revenue of up to USD 165 million until the end of Q1 2024, down 43.57% year-on-year (yoy) from USD 292 million. Then, it is followed by nickel sales in the form of ferronickel and nickel in matte, worth USD 97 million.

Gunara believes that the selling price of coals has started to stabilise, especially after a drastic surge in 2022 and sharp downturn in 2023.

“For nickel price, it is still quite fluctuating; after a drastic drop earlier this year, it has continued to rise up to USD 20,000 per ton,” said Gunara.

“We are optimistic that the range of USD 16.000 to 20.000/ton will provide a good potential margin for the operational activities of the company,” added Gunara. (ZH)