Amman Mineral Raises $715 Million in Highly Successful 2023 IPO in Jakarta

PT Amman Mineral Internasional, a holding company for world-class gold-copper mining operations and the owner of the second-largest gold-copper mine in Indonesia, successfully raised $715 million in an initial public offering (IPO). The company sold 6.33 billion shares for 1,695 rupiah per. The source of this information remained anonymous, as the data has yet to be released publicly.

Amman Mineral initially set the base offering size at 6.29 billion shares, according to a terms sheet from Bloomberg News. Trading on the Jakarta Stock Exchange is set to begin on July 5.

Amman Mineral’s initial public offering marks Asia’s largest IPO of the year, excluding China. In Southeast Asia, first-time share sales had so far reached $2.2 billion in raised funds since the beginning of this year, showing a 77% increase year-on-year. A few regions, like Hong Kong and Singapore, have dipped in performance in recent months despite these impressive figures, ultimately offsetting the total percentage gains.

The renewable energy sector represented a major cause of these gains. The metal and mining sub-sectors relating to electric vehicle required parts have created new areas of demand, and thus shares, from foreign and domestic investors alike. Jakarta’s group of mining corporations is set to be the top group in Indonesia since April 2022.

Amman Mineral’s Batu Hijau mine is the second-largest gold and copper mine in Indonesia. The company also plans to expand its efforts soon with the Elang project. When combined, the Batu Hijau mine and Elang project will be the fifth-largest copper project in the world.

In 2022, Amman Mineral’s net income totaled $1.09 billion. The posted net income reflected an increase of more than triple from the year prior.

What might be the most significant aspect of Amman Mineral is its ability to operate in a cost-effective way for ultimate gains. The company has one of the cheapest cash costs of all mines across the globe. The low cash costs and excellent demand rates in precious metals right now have allowed Amman Mineral’s profitability to grow exponentially.

“However, copper prices might possibly be on a downtrend in the near term, which would affect the company’s prospects given that it doesn’t intend to undertake any hedging policies,” analysts Ethan Aw and Sumeet Singh explained in a note while discussing the company’s successes. Even if copper were to go down, the company should still be able to rely on rising gold prices, which seem to have fearless success levels in 2023.

Gold remains up by $105.80 per ounce this year and $673.60 per ounce from the last five years. The precious metal started 2023 at around $1,840 per ounce and peaked at $2,055 per ounce just a few weeks back in May.

Amman Mineral plans to use its proceeds from the initial public offering for working capital, to pay off debts, and to fund its West Nusa Tenggara province refinery projects.

In its 2022 report, Amman Mineral produced 17.12 billion pounds of copper and 23.20 million ounces of gold. The Batu Hijau mine and Elang exploration area sit on the island of Sumbawa, which offers a gorgeous tourist attraction and a wealth of natural resources that support the local community.

As of 2023, the company’s Batu Hijau mine has been able to contribute approximately 85% of its revenue to the West Sumbawa district and over 17% to the province of West Nusa Tenggara. The company aims to support the local economic development of its communities through sustainable practices that encourage long-term growth in the tourism industry and with small or medium-sized enterprises.

The company’s latest news shows perfect examples of its commitment to this goal. For example, a couple of weeks ago, Amman Mineral paid to send 12 young football players to the prestigious PSS Sleman Academy in Yogyakarta.

“AMMAN has initiated such an extraordinary programme to empower football in KSB. This programme can help young people develop their athletic talents, especially in football. We really appreciate it and hope that the participants will prepare themselves in the best way and compete in sports,” Amar Nurmansyah, the chairman of the KSB Football Association, explained.

In other recent news, Amman Mineral entered into a concentrate sales agreement with Glencore International. Following the agreement, Glencore will purchase no less than 400,000 tons of concentrate in total from the Batu Hijau mine between the years 2024 and 2026. The arrangements give Glencore a discount of $25 million in total.

As Amman Mineral continues refining its production, we can likely expect more exciting news from the company coming soon.

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