Gold Miners Strategize as Prices Surge: MDKA to AMMN Lead the Charge
25 Apr 2025, 07:51 PM
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Several gold mining companies are taking advantage of the precious metal price rally to increase revenue this year. Efforts to reduce production costs are also being pushed to widen profits.GM Corporate Communication PT Merdeka Copper Gold Tbk (MDKA) Tom Malik said the ongoing increase in gold prices has had a positive impact on the company's performance.However, said Tom, the company cannot automatically increase production because mining activities refer to the work plan and budget (RKAB) that has been approved by the Ministry of Energy and Mineral Resources (ESDM)."The increase in gold prices has certainly had a positive impact on the company's performance," said Tom when contacted, Thursday (24/4/2025).MDKA plans to record gold production of 100,000 ounces to 110,000 ounces with cash costs between USD 1,100 per ounce and USD 1,200 per ounce this year.Meanwhile, all-in sustaining costs for this year are targeted at USD 1,500 per ounce to USD 1,700 per ounce.On the other hand, Tom said, government regulations requiring mining industry players to use B40 biodiesel from early 2025 have also increased the company's production costs this year."MDKA always innovates and makes efficiency to reduce production costs and increase margins," he said.Slight ImpactOn the other hand, Vice President of Corporate Communications and Investor Relations of PT Amman Mineral Internasional Tbk (AMMN) Kartika Octaviana said that the current gold price movement does not have much impact on the company's production strategy.AMMN, said Kartika, continues to produce gold as optimally as possible, in accordance with the mining plan based on a comprehensive mining geology study."In accordance with the guidance we released in March, FY 2025 production is planned to be around 228 million pounds of copper and 90,000 ounces of gold," said Kartika when contacted, Thursday (24/4/2025).Similarly, President Director of PT Amman Mineral Nusa Tenggara (AMNT)—a subsidiary of AMMN—Rachmat Makkasau said that his company is trying to reduce production costs amidst the current momentum of the gold price rally."So our productivity is getting better," said Rachmat when met on the sidelines of the Indonesia AI Day agenda, Thursday (24/4/2025).Just for the record, the price of gold had set a new record by breaking through the USD 3,500 per ounce level for the first time, driven by market concerns that President Donald Trump would fire the Governor of the US central bank or the Federal Reserve (The Fed), Jerome Powell.This uncertainty has prompted investors to flee from stocks, bonds and the US dollar towards safe haven assets such as gold.Gold rose 1.1% to USD 3,323.50 an ounce on Thursday in New York, after rising as much as 2.4% in the session. The Bloomberg Dollar Spot Index fell 0.2%. Silver slipped while platinum and palladium gained.Through 2025, gold prices have jumped by a third, as trade tensions roil global markets and erode confidence in dollar-based assets.“Gold’s rapid rise this year shows that the market is increasingly losing confidence in the United States,” said Lee Liang Le, analyst at Kallanish Index Services.The increase was also driven by inflows into gold-based mutual funds and purchases by central banks, with the price of the precious metal posting increases every month so far this year.Several major banks are also increasingly optimistic about gold's prospects amid the continuing rally. Goldman Sachs Group Inc, for example, estimates that gold prices could reach USD 4,000 per ounce by the middle of next year.
