INDONESIA GOLD RESOURCES AND EXPLORATION CHALLENGES

(Source: Prihananto, 2011)

Dr. Arifudin IdrusDepartment of Geological Engineering

Gadjah Mada UniversityE-mail address: arifidrus@gmail.com

Disampaikan pada ‘One-day Course: “Pemanfaatan dan Prospek Sumberdaya Emas di Indonesia”; HMTG-UGM, 1 Oktober 2011

WHY GOLD?

• Part of human life since ~6,000 years ago

• Relatively minor occurrences, but widespread in geographic distribution

• Physical properties and valuable deposit

• Unique economic behavior (in both small and large scale)

GOLD PRODUCTION 1900-1989(from various sources)

0

10

20

30

40

50

Gold

(ton

nes)

Sumatra

ErtsbergPacific War

Dutch Colonial Era Independence

CoW

Sukarno | Soeharto

GOLD DISTRICTS 1900-1989

Mangani

Ertsberg

Cikotok

North Sulawesi

KalimantanAlluvials

Lebong

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Gold Production (Tonnes)

11.7 16.0 38.2 43.3 42.6 62.8 83.6 90.0 124.0 133.0 124.0 224.7 187.1 172.1 127.8 163.1 116.3 159.3 29.1 97.7 109.8

Gold Price (USD)

385.51 362.11 343.82 359.77 384 383.78999999

9999

387.81 331.02 294.24 278.97999999

9999

279.11 271.04 309.72999999

9999

363.38 409.72 444.74 603.49 695.39 871.96 972.34999999

9999

1224.53

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

240.0

150.00

250.00

350.00

450.00

550.00

650.00

750.00

850.00

950.00

1,050.00

1,150.00

1,250.00

1,350.00

1,450.00

11.716.0

38.243.3 42.6

62.8

83.6

90.0

124.0

133.0

124.0

224.7

187.1

172.1

127.8

163.1

116.3

159.3

29.1

97.7

109.8

Year

Go

ld P

rod

uct

ion

(T

on

nes

)

Gold Price (USD)

INDONESIA GOLD PRODUCTION (1990-2010)Source: ESDM (2011); KITCO (2011)

China South Africa United States Australia Indonesia Peru Russia Canada PNG Ghana

2007

Gold (Tonnes) 276 272 255 251 171 167 153 93 67 63

25

75

125

175

225

275

325

375

276 272 255 251

171 167 153

93 67 63

TOP TENS GOLD PRODUCERS (2007) Source: USGS 2007 Mineral Year Book

Go

ld P

rod

uct

ion

(To

nn

es)

China Australia United States South Africa Russia Peru Indonesia Ghana Canada Uzbekistan

2010

Gold (Tonnes) 341 266 240 190 190 170 120 100 90 90

25

75

125

175

225

275

325

375 341

266 240

190 190 170

120 100 90 90

TOP TENS GOLD PRODUCERS (2010) Source: Gold Mining Journal 2011

Go

ld P

rod

uct

ion

(To

nn

es)

Total: 1,797 tonnes

Total: 1,768 tonnes

GOLD PRODUCTION DECREASING ???

• Gold deposit potential depleted No

• Decreasing of exploration activities and lack of new discoveries ???

• Technical aspects• Non technical aspects

GOLD DEPOSIT TYPES

• Witwatersrand

• Greenstone Belt

• Epithermal including Carlin (sediment hosted)

• Porphyry/ skarn

• Orogenic Gold

• Volcanogenic Massive Sulfide (VMS)

• Others

DEPOSIT MODEL (Corbett, 2005)

REGIONAL GEOLOGY OF INDONESIA

MAGMATIC ARCS OF INDONESIA (Carlile ane Mitchel, 1994)

GOLD RESOURCES + RESERVES 1969 – 2010 (desk study)

167.66 Moz (5,214.38 tonnes) gold

N: 94

News Release 15.84 moz

Published Paper147.48 moz

Unpublished Report4.34 moz

News Release

Published Paper

Unpublished Report

GOLD – BY MAGMATIC ARC

167.66 Moz (5,214.38 tonnes) gold

Sunda-Banda35.59 moz

Kalimantan11.40 moz

Sulawesi 15.80 moz

Papua100.15 moz

Halmahera3.83 moz

Other0.90 moz

Sunda-BandaKali-mantanSulawesi PapuaHalmaheraOther

GOLD – BY DEPOSIT TYPE

167.66 Moz (5,214.38 tonnes) gold

Porphyry71.3 moz

Skarn 47.78 moz

HS Epithermal9.41 moz

LS Epithermal31.07 moz

VMS0.97 moz

Mesothermal2.87 moz

Sediment Hosted3.08 moz

Alluvial1.18 moz

Deposit TypePorphyrySkarn HS EpithermalLS EpithermalVMSMesothermalSediment HostedAlluvial

GOLD – BY PROJECT STATUS

167.66 Moz (5,214.38 tonnes) gold

Mined Out20.00 moz

Being Mined109.02 moz

Exploration 37.52 moz

Unknown1.13 moz

Project Status

Mined Out

Being Mined

Exploration

Unknown

GOLD MINES 1990-2010

MeselMt. Muro

Kelian

Grasberg

Cikidang

Gosowong

Batu HijauWetar

Rawas

Active

Closed

Sediment Hosted

LS Epithermal

Porphyry/ Skarn

VMS

Pongkor

Lb Tandai

Kencana

Mt. Muro West

…….

…….

…….

…….

Cibaliung

Buduk

PRIMARY GOLD DEPOSITS/ OCCURENCES

Toka TindungSeruyung Tombulilato

WabuWay Linggo

ElangAwak Mas

Pungkut

Active

Closed

Sediment Hosted

LS Epithermal

HS Epithermal

Porphyry/ Skarn

Mesothermal Vein

Mirah

Martabe

Motomboto

…….

…….

…….

…….

…….

Bukit Tujuh

Palu

Jelai-Mewet

Pangulir

Ojolali

0.010

0.100

1.000

10.000

100.000

1000.000

0.100 1.000 10.000 100.000 1000.000

Deposite Size (Mt)

Gra

de

(g

/t A

u)

Porphyry Skarn VMS Sedimen Hosted LS Epithermal Mesothermal Vein HS Epithermal

GEOLOGICAL TARGET TYPES

HS EPITHERMALField

LS EPITHERMALField

SKARNField

PORPHYRYField

GOLD MINE – LAPSE TIMES

Mine Owner StatusContractSigned Production Lapse

           

Lebong Tandai Billiton (CSR) Closed 1985 1986 1

Gosowong Newcrest Closed 1997 1999 2

Wetar Billiton Closed 1986 1991 5

Ertsberg Freeport Closed 1967 1973 6

Pongkor Antam Production 1988 1994 6

Kelian Riotinto Closed 1985 1992 7

Mt. Muro Aurora Closed 1985 1994 9

Kencana Newcrest Production 1997 2006 9

Mesel Newmont Closed 1986 1996 10

Rawas Laverton Closed 1986 1997 11

Cibaliung Austindo/ Antam Production 1998 2010 12

Batu Hijau Newmont Production 1986 1999 13

Mt. Muro West Straits Production 1985 2004 19

Grasberg Freeport Production 1967 1989 22

   

Average Lapse Time (Years)       9.5

GOLD MINE – LIFE SPANSMine 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

                                           

Grasberg                                          

Lebong Tandai                                          

Alluvials                                          

Wetar                                          

Kelian                                          

Pongkor                                          

Mt. Muro                                          

Mesel                                          

Rawas                                          

Gosowong                                          

Cikidang                                          

Batu Hijau                                          

Mt. Muro West                                        

Kencana                                          

Cibaliung                                          

      Porphyry       VMS

      LS Epithermal       Sediment hosted

      Alluvial

FACTORS AFFECTING INDUSTRY’S FUTURE

Geological Prospectiveness (++)

Country Stability (+)

Gold Price (++)

Legal/Commercial Basis ( - )New Mining Law, lack of implementing regulations

Intensity of Exploration Efforts (– to +)

CONCERNS IN INDONESIA(non technical aspects)

Uncertainty in mineral tenement system (Mining Law No.4/ 2009 with lack of implementing regulations)

Forestry overlapping issues

Pains of regional autonomy

Illegal mining

Local community / NGOs

EXPLORATION CHALLENGES technical aspects

2. Exploration “going deeper”

Development of new geological/ exploration model

Application of new technology

Advanced exploration techniques and approaches

Higher exploration costs

1. Opportunity to generate/ develop new projects is sliming Matured Exploration Areas

3. Professional ability and skill of “explorationists”

MAJOR GOLD DEPOSIT TYPES IN INDONESIA

• Epithermal

• Porphyry/ skarn

Porphyry vs Epithermal