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Sustainability Report

Year 2007

Operating Sustainably
Corporate Profile
Please see page 8

Corporate Policy,
Corporate Governance, and
Management System
Please see page 16

Sustainability Performance
Please see page 24
Table of contents
H ighlight 1 S U S TA I N A B I L I T Y P E R F O R M A N C E 24

Introd uction : A Closer Loo k at this FINANCIAL PERFORMANCE 25


3
Report ENVIRONMENTAL PERFORMANCE 29
L etter from the Board of SOCIAL EMPOWERMENT 46
4
C ommissioners
Implementing Human Rights Through
53
L etter from the Board of Directors 6 Commitment And Education

CORPORATE PRO F I L E : Building Sustainability Together With


8 54
Community
INTRO D UCING A ntam
Responsibilities towards Product Impact 60
Antam IN BRIEF 9
CROSS REFERENCE WITH GRI (G3) 62
Antam in Figures 2007 12
C O R P O R AT E I N F O R M AT I O N 69
Certification and External
13
Acknowledgement

Operational and Development Area 14

Policy, C orporate G o vernance an d


16
M anagement System

Improving the corporate governance and


17
management system

Implementing An International Standard


22
Management System

Stakeholder Engagement 23
Highlight
Economy
We are a diversified, Indonesian, vertically integrated, mining and metals
company. Our main goal is to create shareholder value by getting bigger
and better and doing it in a sustainable and correct way.

Our sales grew 113% to Rp12,008 billion in 2007, and with a moderate
cost increase, net profit rose 230% to Rp5,132 billion (US$562 million)
with a 230% increase in EPS to Rp538.08 compared to Rp162.79 in 2006.
Inline with increased production and commodity prices, as well as smaller
increase in ferronickel and nickel ore costs, our financial performance
in 2007 was a record breaking figure in the history of Antam. Our net
margin of 43% was the highest in the Indonesian mining industry and
outperforming most of our peers.

The year 2007 can be characterized as year of exploration for the next
growth phase. It was a milestone year as Antam began the commercial
operation of the FeNi III smelter and inline with the strong cash flow, we were
ready to invest for a better future. Antam has a large, high quality nickel and
bauxite reserves and we plan to create the most value from our reserves
and resources through our solid project pipeline in the years ahead.

Environment
Antam’s commitment to proper environmental management was reflected
in the corporate restructuring. We formed a specific department at the
Head Office to manage environmental and post mining strategic issues.

Antam’s efforts in the proper environmental management implementation


were also reflected by obtaining the ISO14001, an internationally accredited
environmental management certification.

Antam’s efforts to operating with the least impact on the environment were
reflected by adopting recycling process. Antam recycled water and utilized
backfill method at the Pongkor gold mine. At Pomalaa, Antam reused
the sludge oil at its ferronickel furnace. In 2007, Antam also focused on
improving its reclamation initiatives.
Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Social
Antam is committed to participate in the community development
surrounding its mines by utilizing the Community Development program,
the Partnership Program, and the Environmental Development Program. In
2007, Antam spent Rp55 billion on community development activities, an
increase of 69% compared to 2006.

Antam spent Rp28 million, an increase of 30% compared to 2006 on


employee education and training.

Target and Achievement 2007

Target Indicator Unit 2007 Target 2007 Actual

Operational Process Nickel tonnes/employee/day 0.0309 0.0319


(Productivity)
Gold (Pongkor) gram Au/employee/day 7.59 7.37

Precious Metals Refinery kg dore/employee/day 0.795 0.980


(Logam Mulia)

Operational Risk Work and Safety Health Score Zero Fatal Accident 0 2

Regulation and GCG Index Index 80 82.07


Environmental
Process Mine closure (On Time Percentage 50 55
Schedule)

Effectiveness of Community Percentage 100 100


Development & Surrounding
Community Program

Employee skill and % of HR Composition Best Percentage 100 107


competency Practices

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Introduction:
A Closer Look at
This Report
The 2007 Sustainability Report is our third yearly presentation of the summary of our contribution
to sustainable development. For the second time, the format follows the framework set out by
the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines G3.

We believe the framework will be useful as a reference for the information contained in this report.

This report presents information related to the sustainable development practices at all of our
business units.

This report aims to provide clear and transparent information to our stakeholders on what we did
and commit to do towards sustainability in our operations, especially in the areas of economics,
environmental management and community development.

We would be pleased to hear any question or feedback to further improve our report in the
future. We believe your opinion will help us to reach our goal in implementing a world class
sustainability initiative.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Letter from the Board of


Commissioners
“We are integrating the sustainable
development concept into our activities.”

Ir. Wisnu Askari Marantika


Komisaris Utama
From left to right:
Prof. Dr. Ir. Irwandy Arif, M.Sc.,
Ir. Supriatna Suhala, M.Sc.,
Ir. Wisnu Askari Marantika,
Ir. Suryo Suryantoro, M.Sc.
Sustainability Report 2007 www.antam.com
Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Dear stakeholder,

The Indonesian archipelago is well known for its vast and rich mineral resources with its location at the Pacific
Ring of Fire. Antam’s mineral deposit is spread throughout Indonesia, beginning from bauxite deposit at Riau
and West Kalimantan, gold at West Java, and nickel ore deposit at Southeast Sulawesi and North Maluku. The
deposit of nickel, our main commodity, is largely located at the eastern part of Indonesia which covers 68% of
the archipelago. The mineral potential at the eastern part of Indonesia is huge as it contains 81% of Indonesia’s
mineral deposit.

Antam seeks to find new deposits to sustain its business. Discovering new deposits is difficult. As such, Antam
seeks to best develop its human capital, especially in the field of mining.

The vast, high quality reserves and excellent competencies of human resources are keys to sustainable operation.

We realize mine closure is part of a natural stage of a mine. We closed several mines such as Gebe, Cikotok and
Cilacap. That said, several other mines are planned to be closed in the coming years.

Sustainable economic, environmental and social development are not merely words. We are integrating the
sustainable development concept into our activities.

The Board of Commissioners oversees and advises the Board of Directors in performing its managerial duties to
increase the shareholders and stakeholders’ value.

We realize it is still a long way toward our 2010 Vision. The commitment and the spirit from the Board of
Commissioners, the Board of Directors and all of Antam’s employees as well as our solid relationship with the
stakeholders will be able to meet future challenges.

Our third sustainability report is also a reflection of the implementation of good corporate governance (GCG) by
presenting transparent and clear information.

We highly value the social license given by our stakeholders and aim not to revoke it by ensuring a proper
environmental management and social development.

We are hopeful this report can be useful as part of our communication and transparency to our stakeholders.

Ir. Wisnu Askari Marantika


President Commissioner

Ir. Suryo Suryantoro, M.Sc. Ir. Supriatna Suhala, M.Sc.


Commissioner Commissioner

Prof. Dr. Ir. Irwandy Arif, M.Sc.


Independent Commissioner

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Letter from the


Board of Directors
“We realize our activities, from exploration,
production and post mining, may have an
impact to the environment and social aspects
of the community.”

From left to right:


Ir. Syahrir Ika, MM.,
Ir. Darma Ambiar, MM.,
Ir. Dedi Aditya Sumanagara,
Kurniadi Atmosasmito, SE., MM.,
Ir. Alwin Syah Loebis, MM.
Sustainability Report 2007 www.antam.com
Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Dear stakeholder,

I am pleased to present our third sustainability report to you. This report highlights our performance as well as our 
challenges we faced in the year 2007.

We realize environmental sustainability and proactive community development are necessary to successfully
realizing our 2010 vision to be a mining company of international standards with a competitive advantage in the
global market.

Antam aims to integrate the concept of sustainability development at its operations. We aim to benefit the
community surrounding its mines.

We realize our activities, from exploration, production and post mining, may have an impact to the environment
and social aspects of the community.

The Commissioner-level Environment and Post Mining committee is responsible for ensuring a proper environmental
and social management. At the operational level, Antam forms an Environmental and Post Mining Department
which is headed by a Senior Manager. Environmental protection and post mining initiatives are part of Antam’s
responsibility with respect to proper environmental and social management.

Antam is also committed to the good implementation of work safety and health, for employees and contractors.

Antam will focus more on the development of the physical, socio-economic, cultural, community and regional
aspects in the coming years. We aim to obtain Green PROPER at all of our mines by 2010. We believe our
foundation is stronger to face future challenges. We aim to create a brighter future with our stakeholders.

We would like to express our appreciation for the commitment by all of Antam’s employees and for the support of
all Antam’s stakeholders in supporting the sustainability development.

Ir. Dedi Aditya Sumanagara


President Director

Ir. Syahrir Ika, MM. Kurniadi Atmosasmito, SE., MM.


Director of HR and General Affairs Director of Finance

Ir. Darma Ambiar, MM. Ir. Alwin Syah Loebis, MM.


Director of Development Director Operations

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Corporate Profile:
Introducing Antam
Antam in Brief
9

Antam in Figures 2007


12

Certification and External Recognition


13

Operational and Development Area


14

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Antam in Brief
Antam is an export oriented, diversified and vertically integrated Indonesian mining company. Our
mining operation is spread throughout the mineral rich Indonesia. Our activities include exploration,
mining, processing and marketing.

Antam was established as a state owned company in 1968 through a merger of several single
commodity national mining companies. In 1997, Antam listed 35% of its shares at the Indonesia
Stock Exchange (formed after a merger of between the Jakarta and Surabaya Stock Exchange).
The public listing was part of a financing exercise the fund the FeNi III ferronickel expansion project.
In 1999, Antam listed its shares at the Australia Securities Exchange with a foreign exempt status
and in 2002 augmented the status to a more stringent status of ASX listing.

Operational and Development Area 


Antam’s head office is located in Jakarta. The nickel operations are located in Southeast Sulawesi
and North Maluku. Antam’s Pongkor gold mine is located in West Java, while its precious metal
refinery unit is located in Jakarta. Antam owns and operates a bauxite mine in Bintan. The iron
sands operation is run by Antam’s subsidiary, PT Antam Resourcindo. Antam has a vast bauxite
and nickel deposits in West Kalimantan and North Maluku, respectively.

Antam’s main commodities are nickel ore, ferronickel, gold, silver, bauxite, and iron sands. Antam
also provide precious metal processing services. Antam hopes to offer exploration services in the
future through its exploration unit, Geomin.

In 2007, Antam owned three subsidiaries. PT Antam Resourcindo operates iron sands mine in
Kutoarjo, Central Java, and a gold mine in Cikotok, West Java. Antam formed Antam Finance
Ltd (Mauritius) and Antam Europe BV (Netherlands) to help issue bonds to finance the FeNi III
expansion project in 2003. As Antam refinanced the bonds in December 2006, Antam Finance
Ltd (Mauritius) and Antam Europe BV (Netherlands) were in the process of liquidation. In
September 2007, Antam made an investment in 60% PT Borneo Edo International which owns
a bauxite mining license at West Kalimantan. In January 2008, Antam increased its investment
from 4% to 80% ownership at PT Mega Citra Utama (MCU) which owns a bauxite mining
license at West Kalimantan.

In 2007, Antam had four main activities, nickel mining, gold mining and processing, bauxite mining
Nickel mining operation.
and exploration unit. Antam operates four nickel mines, one gold mine, and one bauxite mine.
Antam owns one precious metals processing and refining facility and one exploration unit. Most
of company’s income was generated from nickel and gold, both contributing 99% of Antam’s
revenue in 2007.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Achievement
The year 2007 was a record breaking year in terms of total return to shareholder. Antam’s share
price rose 176% to Rp4,475 at the end of the year. Antam’s market capitalization amounted to
Rp42.7 trillion (US$4.5 billion) at the end of 2007. In 2007, Antam’s share price rose as high as
Rp5,050. Antam also gives return in the forms of dividend. Since its listing at the Indonesia Stock
Exchange in 1997, Antam consistently distributes dividend to its shareholders. In 2007, Antam
paid a cash dividend of Rp621 billion, or 40% dividend payout from the company’s net income as
of 31 December 2006. The amount is equal to Rp65.12 per share (or Rp325.58 per share prior to
a 5:1 stock split in July 2007).

Antam’s sales increased 113% to Rp12,008 billion, and with a moderate increase of operating
10 costs, net margin increased 230% to Rp5,132 billion (US$562 million). Antam’s Earning per Share
(EPS) rose 230% to Rp538.08 from Rp162.79 in 2006. Antam’s profits were at all time high inline
with higher nickel price as well as increased production and a relatively smaller cost increases at
the ferronickel and nickel ore operations.

Despite an increase of Antam’s total equity due to a 105% rise in free cash flow to Rp8,764 billion,
and without adding new debt, Antam was able to increase its return on equity to 79%, a significant
jump compared to 36% in 2006. In 2007, Antam reduced its debt to equity ratio to 10%.

Antam’s profit margins rose significantly in 2007. In 2007, Antam’s gross margin amounted to 60%,
while operating and net margin rose to 57% and 43%, respectively.

Value Creation
In 2006, Antam’s net profit amounted to Rp1,553 billion with EPS of Rp 162.79. In 2007, Antam net
profit amounted to Rp5,132 billion, a 230% increase with EPS of Rp538,08. Antam’s net margin
rose significantly to 43%, largely due to increased prices of nickel and gold as well as a rise in Underground gold mining at Pongkor.
nickel ore and ferronickel sales.

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Strength
Antam is located in Indonesia, a mineral rich country. The average returns and margins of Indonesian
mining companies are higher than the average of its international mining peers. Antam aims to
create and increase its value through the development of its vast reserves and resources.

As an Indonesian mining company, Antam may benefit from the richness of Indonesia’s mineral
deposit. As well, as a state owned company, Antam may benefit from government policy which
may prioritise state owned companies in developing Indonesia’s mineral deposit.

Antam has the commitment to implement good corporate governance practices. Antam aims
to create value to its shareholders. Antam aims to treat its shareholders, both majority and
minority, equally. 11

Antam has a solid track record of operating history. Antam has nearly four decades of experience
in exploration, processing, refining and marketing of mineral products. Antam’s exploration unit,
Geomin, has experiences to successfully find profitable deposits. Antam also has a positive track
record in operating modern processing and refining plants.

Antam has diversified, long term and loyal customers. Antam does not rely its market into a single
region or country.
Antam Power Plant lll at Pomalaa.

Inline with a strong balance sheet, healthy cash position and prudent financial management,
Antam is poised for growth.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Antam in Figures 2007

Sales contribution from gold operation 9%

Sales contribution from ferronickel sales 48%

12 Sales contribution from nickel ore sales 41%

Revenue from nickel segment Rp10,687 billion

Revenue from gold segment Rp1,163 billion

Percentage of sales increase 113%

Operating Cashflow Rp6,182 billion

Retained Earnings Rp7,785 billion

Ownership of the Government of Indonesia 65%

Non Tax Contribution to the State Rp689.4 billion

Number of Employees 2,716

Investment for Environmental Management Rp42.6 billion

Operational Area 4,998 hectares

Reclamation Area 3,876 hectares

Partnerships Program Expense Rp10.3 billion

Recipient of the Partnership Program 2,312

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Certification and External


Recognition
Best 2006 Environmental Reporting at the 2007 Indonesia Sustainability
Reporting Award (ISRA).

Annual Report Award 2006 13


• Ranked 1st Overall
• Ranked 1st SOE Non Finance Category

League of American Communication Professionals (LACP) 2006


Vision Awards Annual Report Competition
• Platinum Winner (Materials Category)
• Gold Winner (Best In-House Report Category)
• Ranked 11th from over 2,500 international entries

Ranked 1st in the Mining and Energy category - Warta Ekonomi e-Company
Award 2007

Asia’s Best Companies 2007 – FinanceAsia


• Best Managed Company (Rank 6th)
• Best Corporate Governance (Rank 5th)
• Best Investor Relations (Rank 2nd)
• Most Committed to a Strong Dividend Policy (Rank 6th)

The Best Corporate Governance Practices 2007 in the Small/Mid Cap Category
in Asia/Pacific by Technical Criteria – IR Global Rankings

Top Performing Listed Company – Investor Award 2007

Gold Medal in 2007 International Conference on Quality Control Circles, Beijing.

Ranked 1st at the Trusted Company category at the Corporate Governance


Perception Index 2006.

Bronze Medal for the North Maluku Nickel Operation at the 2007 Reclamation
Award from the Department of Energy and Natural Resources.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Operational and Development Area

Head Office and Geology Unit


Gold
Nickel
Iron Sands
Bauxite

14
14

I N D O N
1
11

7
5
1
2 6

15

6
7
10
2 3

HEAD OFFICE GOLD AND REFINING BAUXITE AND IRON SANDS


Assets Rp5,618 billion Assets Rp707 billion Assets Rp212 billion
Sales - Sales Rp1,163 billion Sales Rp158 billion
Employees 282 Employees 740 Employees 175

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Operations (100% Antam) Antam’s Projects


Type Location Strategic or Majority Stake Development Projects
1 Bauxite Mine Kijang 1 Tayan Chemical Grade Alumina (CGA) Antam 49%
2 Gold Factory Cikotok 2 SGA Munggu Pasir Antam 49%
3 Gold Mine Cikidang 3 Pearl Project (FeNi IV and Hydromet) Antam 50%
4 Irons Sands Mine Kutoarjo 4 Tsingshan Nickel and Stainless Project Antam 60%
5 Irons Sands Mine Lumajang 5 PT Borneo Edo International Antam 60%
6 Precious Metal Refinery Jakarta 6 PT Mega Citra Utama Antam 80%
7 Gold Mine and Factory Pongkor 7 SGA Mempawah Antam 55%
8 Nickel Mine and Smelters Pomalaa 8 Sponge Iron with Krakatau Steel Antam 34%
9 Nickel Mines Tanjung Buli, Mornopo, Gee

Certain Minority Stake Joint Venture Projects 15


9 PT Nusa Halmahera Minerals* Antam 17.5%
10 PT Cibaliung Sumberdaya Antam 10.25%
11 PT Sorikmas Mining Antam 25%
12 PT Gag Nickel Antam 10%

E S I A 13 PT Weda Bay Nickel


14 PT Dairi Prima Mineral
Antam 10%
Antam 20%
15 PT Galuh Cempaka* Antam 20%
5
*currently operational

9
3
13

4
12

NICKEL AND REFINING


Assets Rp5,501 billion
Sales Rp10,687 billion
Employees 1,504

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

16

Corporate Policy, Corporate


Governance, and Management
System
Improving the corporate governance and management system
17

Implementing International Standard Management System


22

Stakeholder Engagement
23

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Improving the Corporate Governance


and Management System
Corporate governance is an evolving concept. Antam believes a consistent and continued
implementation of good corporate governance will help ensuring a sustainable growth. Antam
believes corporate management should be based on the principles of transparency, accountability,
responsibility, independency, fairness and equality.

Antam formally began the implementation of good corporate governance when it listed its shares
at the Indonesia Stock Exchange (IDX) and the Australia Securities Exchange. Since then, Antam
has improved its corporate governance practices in view of increasing the shareholders and
stakeholders value. Other state owned companies frequently conduct visits to Antam for corporate
governance study. In the long term, Antam believes the GCG implementation may help increase
the investors’ trust and improve the investment condition in Indonesia as a whole.

Laying a solid foundation to managing and supervising the company


The Corporation Law No. 40/2007 states a corporation governing body consists of the Shareholders
Meeting, the Board of Commissioners, and the Board of Directors. Indonesia adopts a two boards
system which consists of the Board of Commissioners who supervise the management of the
company and the Board of Directors who manage the daily operation of the company.

Antam formulates a Corporate Policy Manual to clearly divide the roles and responsibilities of
the Board of Commissioners and the Board of Directors. The Corporate Policy Manual is one of
the three major GCG documents. Two other major documents are the Management Policy and
the Standard Operating Procedure. The Corporate Policy Manual consist of corporate guidelines 17
which must be adhered by Antam’s employees.

The chapters at the Corporate Policy Manual are:


• Strategic planning
• Organization
• Corporate Secretary
Gold ore processing at Pongkor.
• Supervision and control
• Risk Management
• Code of Conduct
• External Relations and Corporate Image
• Legal
• Operations
• Human Resource Management
• Finance and Accounting
• Information Technology
• Procurement
• Corporate Social Responsibility

In 2007, Antam improved its GCG practices with the finalization of the revised Corporate Policy
Manual, completion of performance assessment of the members of the Board of Directors and
members of the Commissioner-level Committees, risk management, corporate sustainability
report, and corporate policies. Antam also established a division to handle GCG implementation
which is headed by an Assistant Senior Manager. In 2007 Antam showed an improvement in
corporate governance practice compared to last year.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Strategic Planning
The Board of Commissioners and the Board of Directors are responsible in setting the strategic
direction of the company. The role and responsibility of each board is described in the articles of
association and the charter of each board. Antam has a strategic planning strategy in the form of
policies and standard operating procedures.

Antam believes strategic planning will better help guide the direction of the company in achieving
its vision. Antam communicates its strategic direction and planning regularly. As well, Antam
regularly reviews its strategic direction to keep the company on track in realizing its vision.

Supervision and Control


Antam conducts supervision and control through internal audit. The internal audit is responsible for
the efficient implementation of internal control, risk management and good corporate governance.
Internal audit practice is based on the Internal Audit Charter, Internal Audit Standard Profession
and Code of Conduct from The Institute of Internal Auditor. Antam utilizes risk based audit at its
business process to align with risk management.

Risk Management
Antam believes risk management is key in decision making process. Antam implements risk
management through context application, risk identification, risk analysis, risk evaluation, handling
policy, supervision and communication process.

Antam has a special department in risk management. The risk management department is
responsible in providing constant assessment of risk in decision making process. Antam proactively
18 implement risk management in its decision making process.

Operation
Antam faces operational challenges in the form of finding economical and profitable reserves.
Antam also faces operational challenges in the form of equipment, materials, environment and
work and health safety aspects. Antam operates in accordance with the existing law as well as
internal guideline. Antam operates with a view of creating a sustainable sustainable profit and
growth. Antam requires its contractors to follow the internal operation guideline.

Underground gold mine at Pongkor.

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Antam’s operational policy includes:


• Exploration activity which incorporate community interests and comprehensive information.
• Bankable Feasibility Study which will allow a proper risk analysis.
• Production aspect that is consistent with Antam’s long term plan.
• Proactive marketing.
• Environmental preservation, mine closure and post mining are integrated parts of Antam’s
mining operation. The mining operation must be based on a proper environmental management
and compliance to the existing standard.
• Implementation of a healthy and safe working environment which adheres to the existing
regulation and related requirements.
• Outsourcing based on a mutual benefit relationship.

Human Resource
Antam ensures its human resource asset is a key factor in achieving the company’s goal. The
human resource management is founded on a meritocracy system based on skill and performance.
Antam’s human resource management system is free from any discrimination including ethnic
group, religion, race and political interests. Antam’s human resource management incorporate all
issues related to human resource such as human resource planning, work termination, employees’
benefit and medical needs.

Corporate Social Responsibility


Antam embeds the corporate social responsibility in its corporate values, code of conduct and
national and international regulations. Antam conducts CSR practices through stakeholders’
Induction program for Antam’s new employees.
identification, implementation, communication and adherence to the existing regulation.
19
Code of Conduct
Every Antam employee must sign the corporate code of conduct. The code of conduct serves as
a business practice guideline.

Antam socializes its code of conduct through coaching and mentoring. Antam forms a helpline
to answer any queries related to code of conduct. Antam’s employees may report any issues
related to the code of conduct to the helpline. Antam treats all information made to the helpline
with utmost confidentiality.

Antam’s employees may talk or report to their superior officer or directly through the Senior
Vice President Corporate Secretary, Senior Manager Legal and Compliance or Senior Manager
Human Resources Management. Employees may also talk with the Board of Directors for more
important issues.

www.antam.com Sustainability Report 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Antam will form an Employee Convention Team should there be any violation. Members of the
team come from the head office or business units. Antam selects members of the team based on
their competency and knowledge.

Antam has an internal audit division which is responsible for internal supervision and control, risk
management as well as good corporate governance implementation. Internal Audit may examine
employees’ complaints in relation to accounting, internal control, fraud as well as employees
and management behavior. The internal audit may also investigate wrongful conducts such as
dishonesty, unethical conduct, conflict of interest, improper leadership, inaccurate information to
the public, as well as violation of existing regulation. Despite a number of reports since the code
of conduct is launched, none have been proven.

Keeping the Shareholder’s Trust


External parties have recognized Antam’s GCG implementation. Antam ranked first in the category
of Trusted Company with a score of 82.07 at the Corporate Governance Perception Index 2006.
The event was held by an independent institution, Indonesian Institute for Corporate Governance.
The survey covered 15 public companies and 8 state owned companies.

The study also showed a 0.407 positive correlation between the GCG practice and return on
equity. The positive correlation indicated any GCG improvement was also likely to increase the
stakeholders’ benefit.

20

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Code of Conduct
Antam’s management formulates the company’s code of conduct in accordance
with the existing law and regulation. As well, the code of conduct also adheres to the
society’s norm.

The Board of Commissioners supervises the implementation of the code of conduct


at the Board of Commissioners and Board of Directors level. Antam’s Director of
GA and Human Resource supervises the implementation of code of conduct at
employees’ level.

THE PRINCIPLES OF CODE OF CONDUCT


1. Equality and Respect to Human Rights.
2. Healthy and Safe Working Environment.
3. Fair working opportunities.
4. Conflict of Interest.
5. Unwarranted payment.
6. Gifts and Entertainment.
7. Relationship with the Government.
8. Relationship with Supplier.
9. International Trade.
10. Confidential Information.
11. Supervision and Utilization of Assets.
12. Intellectual Property Rights.
21

General Meeting of
Shareholders

Board of
Commissioners
Nomination, Risk Environment
Remuneration & Human Management & Post Mining Audit
GCG Committee
Resources Development Committee Committee Committee
Committee

• Learning and
Corporate Risk Environment
Assessment
Secretary
• HR Management
Board of Management and
Directors Post Mining

Formal line of command Internal Auditor External Auditor


Business Units
Coordination

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Implementing International Standard


Management System
Antam’s business units keep proper management system documentation to ensure smooth
operational process and continuous improvement.

Antam aims to manage its business units in accordance with the international standard. The
following business units have implemented international management system:
• Pongkor Gold Mining Business Unit meets the requirements of Quality Management System
ISO 9001 and Environmental Management System ISO 14001.
• Pomalaa Nickel Mining Business Unit meets the requirements of Quality Management
System ISO 9001 and Environmental Management System ISO 14001.
• Precious Metal Processing and Refinery Business Unit meets the requirements of Quality
Management System ISO 9001, Environmental Management System ISO 14001 and Quality
Laboratory Management System ISO 17025.
• Geomin Unit meets the requirements of Quality Management System ISO 9001.

Antam strives to improve its business processes. In 2002 Antam established Quality Management
division to facilitate improvement process by providing support for improvement process at the
head office and business units. Examples of business process improvement include:
• The implementation and integration of Balanced Score Card into the Performance
Management System.
• The implementation of Malcolm Baldrige Criteria for Performance Excellence.

In 2007, Antam received Gold medal at the International Convention on Quality Control Circle
22 (ICQCC) in Beijing. In 2006, Antam also received similar award at the same event held in Bali.

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Stakeholder Engagement
Antam understands the importance of communication with its stakeholders. Antam engages its stakeholders in strategic
planning process, as well as implementation and evaluation of company’s initiatives. Antam utilizes a number of tools to
ensure effective communication with its stakeholders.

Operational Meetings Shareholders general meeting

Consultative meetings between Annual meeting to discuss company


Antam and its business partners. performance and strategic policy.

Annual Report and Press Release Bipartite Forum:


Management and Labor Union
Reports that communicate the
company’s performance to public Meetings to discuss industrial
and media. relation and employee related
matters.
Shareholders

Business
Mining Operation Meetings Partner Employee Tripartite Forum:
Management, Labor Union and
Meetings that discuss environmental Government
impact and mine operation.
Meetings to discuss industrial
relation problem that cannot be
Mining Local settled in bipartit forum.
Antam
Authority Government

Meetings with Buyers Development Planning Meeting


with Local Stakeholders 23
Meetings to obtain customer’s Buyer PEDP
expectations, requirements, Meetings to discuss local
feedbacks and complaints on development planning.
Antam’s products and services. Local
Community

Community Development and Partnership and Environmental


Relation Development Program (PEDP)

Managing the interests of the local Program to develop local economy


surrounding communities. and infrastructure.

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Sustainability Performance
24
Financial Performance
25

Environmental Performance
29

Social Empowerment
46

Implementing Human Rights Through Commitment and Education


53

Building Sustainability Together with Community


54

Responsibilities towards Product Impact


60

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Financial Performance
Performance through Expansion, Sharing with Empathy

In 2007, net profit increased 230% to Rp5,132 billion due to the increased commodity prices
and production volumes
Indonesia is a mineral rich country and well regarded for its mineral potential. As a mining company,
Antam has vast reserves and resources as well as high quality human resources as its assets.

In 2007 Antam’s exploration activities were focused on nickel, gold and bauxite. The exploration
cost rose 32% to Rp125 billion. In 2007 Antam spent Rp91 billion for nickel exploration, Rp26
billion for gold exploration and Rp8 billion for bauxite exploration. Geological and drilling activities
were the major components of the exploration cost.

In 2007, Antam’s nickel saprolite reserves and resources amounted to 180.9 million wet metric
ton (wmt). Meanwhile, nickel limonite reserves and resources amounted to 214.2 million wmt.
Antam’s gold and bauxite reserves and resources amounted to 4 million wmt and 81.6 million
wmt respectively.

Antam’s vast reserves and resources is one of the company’s competitive advantages. Antam
estimates it may operate for several decades at the current production level even though it
stops exploration.

2007: A Record Breaking Year


Antam posted a record breaking performance in 2007. Antam generated a strong cash flow and
the company was ready for enter its next growth phase. The strong performance in 2007 was
largely due to increased production as well as commodity prices.

SALES AND PROFITS In 2007, revenue rose 113% to Rp12,008 billion compared to Rp5,629 billion in 2006. The significant
(In billion Rupiah) increase was due to increased production and sales volume of ferronickel, nickel ore and gold.
Higher commodity prices also contributed to the record breaking performance.
12,008.2

Production of ferronickel rose 28% and contributed 48% of Antam sales. Increased demand
boosted nickel ore export by 63% and contributed 41% of total sales. Inline with higher revenue 25
from the nickel, the contribution of nickel segment amounted to 89% compared to 84% in 2006.
Sales from nickel segment rose 126% to Rp10,687 billion. Despite lower gold production inline
6,796.1

with lower gold grade, sales of gold jumped 50% as Logam Mulia conducted gold trading from
5,629.4

third parties. Inline with increased gold sales, Antam’s silver sales also increased. Sales from the
5,132.1

gold segment which included gold, silver and income from precious metals services rose 68% to
Rp1,163 billion. Nickel and gold segment contributed 99% of Antam’s revenue in 2007.
3,251.2
2,859.5

2,403.7
1,552.8
1,099.8
1,096.6

Similar with previous years, Antam remained an export playet with export market contributing
841.9
810.3

97% of sales. Antam’s domestic sales came from gold sales (approximately a quarter of gold sales
came from the domestic market) and precious metals refinery services.
04 05 06 07
Antam’s ferronickel customers are world class stainless steel producers such as as Thyssen Krupp
Sales
Nirosta, Outokumpu, AvestaPolarit, Arcelor Mittal, Nisshin Steel, Nippon Yakin Kogyo and Yieh
Operating Profit
United. Antam exported its gold to Standard Bank London in Singapore. The sale of ferronickel in
Net Profit

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Europe which is handled by Avarus AG, had the biggest contribution to Antam sales, amounted OPERATING CASH FLOW
to 29%. The second largest consumer was Posco which contributed Rp1,438 billion to Antam’s (In billion Rupiah)

sales. Yieh United of Taiwan contributed Rp1,155 billion of sales or 10% of Antam’s total sales.

4,835
Facing the Challenges with Efficiency
Similar to other world’s mining companies, Antam posted higher cash costs inline with increased
costs of materials, labor and transportation. Despite higher costs, Antam remained a competitive
commodity producer, with the exception of ferronickel.

1,711
Cash cost of ferronickel increased 26% to US$5.55 per pound iline with higher price of ore feed

769

742
from PT Inco and higher fuel price. The biggest component of ferronickel total cost was material
which contributed 58%, followed by 21% contribution from depreciation. The biggest component 04 05 06 07
from material cost was fuel and ore feed from PT Inco, each of them contributed 43%. The third
biggest component in material cash cost was supplementary material with 8% contribution.
LABOR EXPENSES
(In billion Rupiah)
A metal consultant based in London predicted the average cash cost of nickel amounted to
US$4.15 per pound in 2007. The lowest cash cost of ferronickel producer was approximately
US$2.1 per pound with the highest cash cost producer amounted to nearly US$7 per pound.

726
Antam planned to convert to a cheaper energy source such as hydro, coal or gas to reduce its

643
586
ferronickel cash cost. Antam currently studies the best energy alternative and hopes a decision to
be made in the near future. Antam also appointed Hatch Ltd. of Canada to conduct a feasibility

442
study of using Smart Predictive Line Controller technology.

221
222
The cash cost of limonite and bauxite rose 30% respectively to US$11.26 per wmt and US$13.44
108
per wmt inline with decreased production. Decreased limonite and bauxite production made
99

the cost per unit became higher. As well, higher cash cost for limonite and bauxite was due to

22
19

16

18
increased cost of mining services. The cash cost of saprolite slightly increased to US$20.32 per
04 05 06 07
wmt. Gold cash cost rose 35% to US$383.1 per ounce inline with higher fuel price. Antam’s silver
Pension and other liabilities
was a gold byproduct and sold to silver jewelers in Indonesia.
Medical Expenses

In 2007, Antam signed a power purchase agreement from PT Tamboli Energy (Tamboli) for Salaries
26
supplying 15MW of hydro power to Pomalaa operating facility. The supply will cover around
15% of the total power requirement. Antam expects reduction of power cost for ferronickel for
8-10% or approximately 3-4% of ferronickel cash cost when the electricity supply from Tamboli
began in 2009.

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CONTRIBUTION TO Sharing Prosperity through Supporting Local Economy


THE GOVERNMENT* As the biggest Indonesian state owned mining company, Antam participates in the efforts to
(In billion Rupiah)
improve the welfare of the surrounding community.
2,571

Antam is committed in empowering the surrounding communities around its mines. Antam utilizes
local resources and gives recruitment priority to local community. Antam also helps to provide
infrastructure in the surrounding community.
928

Antam aims to provide sufficient employees’ welfare. Antam also utilizes post mining programs
806

and supporting the surrounding community through the Community Development Program, the
390

Partnership Program and the Environmental Development Program.

04 05 06 07
Antam shares its empathy through sharing with others.
*Including tax, royalty
and other non tax
contribution.

FUNDS DISTRIBUTED FUNDS DISTRIBUTED THROUGH THE ENVIRONMENTAL FUNDS DISTRIBUTED


THROUGH THE PARTNERSHIP DEVELOPMENT PROGRAM THROUGH THE PARTNERSHI
PROGRAM (In billion Rupiah) PROGRAM
(In billion Rupiah) (In billion Rupiah)
4.4
3.8

10.3
10.3

2.3

4..9
4..9

1.8

1.7
1.4

1.4

1.4
1.2
1.0

0.95
0.95

0.7

.9
.9

0.4
0.15
0.05
0.02

05 06 07 05 06 07 27
05 06 07
• 2005: Funds were distributed
to industrial, trade and services
sectors.
Natural Disaster Aid
• 2006: Funds were distributed to
industrial, trade, animal husbandry, Education and Training Aid
fishery and services sectors. Medical Aid
• 2007: Funds were distributed to
industrial, trade, animal husbandry, Infrastructure Development
fishery and services sectors. House of Worship

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Head of Social and Economy Sectors of the Regional Planning Agency


Bogor Regency
Ir. Nano Supriatna, MM
The local government of Bogor Regency has recognized
positive influence from Antam’s presence in the
neighborhood. Since 1999, Antam has carried out its
responsibility as required by the law and since the year
of 2000 demonstrated its responsibility as Corporate
Citizenship by contribution including royalty to Provicially
Generated Revenue to increase social and economy
sectors of communities.

It is expected that Antam will conduct economic assessment of company’s activities


in order to substantiate how much Antam has contributed to the communities in the
vicinity of mining site and the regency of Bogor. For example, if Antam is building road
facilities and bridge for the people of Nanggung village, then there will be positive as
well as negative multiplier effects to social, economy and environment such as easier
transportation to send agricultural, plantation crops, fishes to the market and easier
access to education and health facilities. The facilities however also contribute to the
pollution caused by the traffic.

In environmental aspect, Antam has conducted many efforts to reduce the environmental
impacts caused by its activities.

However, we expect for better coordination between Antam and local government in
social, economy and environmental activities, which will be discussed in Development
Planning Conference. This is important to avoid any overlapping in planned activities
stated in local government budget.
28
Local government and Antam will formulate 5 years activities planning. This is
according to Antam’s Community Development preparation to develop master plan
for anticipating post-mining period. It is expected to reduce the risk of community
dependency on Antam, therefore, the mining closure may have minimal impacts
because Antam and local government already arrange necessary preparations to
achieve independent society.

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Environmental Performance
Preserving the Environment, Maintaining Sustainability

Strong commitment to preserve the environment, foster relentless care beyond mining
operations
Antam understands that mining activities can pose potential damage to the environment and
the society. However, Antam believes it is possible in mining business to preserve balance with
nature and environment.

With strong adherence and commitment from all of Antam’s employees to restore land function
during mining operation and post mining activities, sustainable environment may be realized.

As codified in chapter 33 verse 3 of the 1945 Indonesia Constitution, “The earth, water and the
natural resources are owned by the state and vastly used for the prosperity of the people”, Antam
conducts mining activities to be used for the prosperity of the people without jeopardizing harmony,
conformity, balance, equal justice and sustainability for now and future.

Policy and Code of Conduct


Antam’s approach to environmental management is stated in occupational health and safety
(K3) policy. Antam prioritizes K3, care for environment preservation and participate in community
development in the context of sustainability development when conducting operations.

The Environment policy emphasizes the following:


• Make every effort to use system, methodology, equipments and materials with lowest negative
impacts to environment on every mining activity.
• Oblige to maximize the use of natural resources in the context of conservation and
lowering waste.
• Oblige to execute and comply with environmental policy (Environmental Impact Analysis,
AMDAL) in operation activities.
• Oblige to minimize land disturbance and conduct rehabilitation program to restore land
function, including the protection of flora and fauna within the lands.
• Oblige to have emergency response procedures for potential activities that may cause
environmental accidents. 29
• Have mine closure and post mining plan in every mining activity.
• Obliged to audit, evaluate and improve environment management on regular basis to improve
environmental performance.

All Antam’s units/divisions when conducting work are bound in code of conduct. Environmental
code of conduct stated that beyond comply to the regulation, Antam shall attempt to reduce
waste, emission and the use of Hazardous and Poisonous Materials (B3); to eliminate risks caused
by operational activities or products; to minimize pollution environment problems effectively and
efficiently; to deliver compulsory training on company’s regulation, law and policy on K3; to ensure
all mining and related employees understand and act upon environmental and K3 procedures.

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Antam’s Commitment in Environmental Sector


Antam intensified commitment to the environment and reflected in Antam’s new organizational ENVIRONMENTAL MANAGEMENT
structure of Environment and Post Mining began on October 2007. The structure reflects Antam’s AND RECLAMATION LIABILITIES
(In billion Rupiah)
concern and main priority of management for environment and post mining aspect.

107
It is expected with this new structure that environmental policy will get more support in its
implementation, in line with global demand to be more conscious on environmental aspect.

89
82

77
Furthermore, Antam has Environment and Post Mining Committee as one of the Committees
established by Board of Commissioners (BoC) to assist in carrying out its roles and responsibilities.

Environmental Cost
Antam’s commitment in environmental sector also demonstrated in the increase of environmental
cost every year. The realization of environmental cost in 2007 compared to 2006 increased 6% to
Rp43 billion. In 2008, Antam budgeted Rp57 billion.
04 05 06 07

To support the implementation of several environmental programs in 2007, total employees


assigned at environmental division reached the highest amount ever of 13 employees. Antam
expects to increase the number of employees in 2008 by 5 more employees (two from bachelor
Grafik Pengeluaran Kapital dan Operasional Lingkungan 2004 - 2008
degree level and three from diploma certification).
Pengeluaran Lingkungan
(Rp Milyar)

ENVIRONMENTAL MANAGEMENT EXPENSE


(In billion Rupiah)

50

43
40
40

30

30
23 22
20

10

0
04 05 06 07

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Environmental Management System


In the effort to manage environment inline with international standards, Antam follows the
environment management standard system developed by the International Organization
for Standardization (ISO) covered in ISO 14000 series. The ISO 14001 standard requires the
environmental management system to cover the commitment and policy, planning, implementation
and operation, audit and follow up action as well as management study. Antam’s main operational
areas has received ISO 14001 certification and conduct regular inspections and internal and
external environmental audit every 6 months, in accordance to ISO 14001 requirements.

One important element in Antam’s environmental management system is setting and reviewing
environmental objectives in company’s budget (RKAP) and affected to performance assessment
from staff to President Director.

Managing Resources Responsibly


Below is discussion of Antam’s performance in resources utilization, including soil, energy, water
and material.

Land
REHABILITATED LAND TO TOTAL For Antam, the responsibility of using the land means to understand functional purposes prior
LAND USE RATIO UNTIL 2007 to exploitation as well as the potential use, the ecological and social value and community
development expectation while the lands are under the company’s operations.

22% Just as shown in chart, the percentage of lands needs to be rehabilitated has trended down in the
last three years. Total areas that need rehabilitation, including open pit mining, infrastructure and
active operational areas can only be rehabilitated after mine closure. The reduction was due to
several mining locations in post mining program and also Antam rehabilitates the areas once the
reserves are exhausted, not until cease of operations.

78% In 2007, Antam planned to rehabilitate 231.8 ha of lands in all operational areas, however Antam
has realized 228.05 ha or above 98% of the target. Until the end of 2007, the total land opening
31
was about 4,997.7 ha and total land rehabilitated was 3,875.9 ha.
Non-rehabilitated land
Rehabilitated land
The ratio between lands require rehabilitating and total land opening showed downtrend. In 2005,
Total land use until 2007 the ratio was 29% and in 2007, the ratio decreased to 22%.
was 4,997.7 hectares.

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Energy

Research and Development


Studying energy use and identifying the energy saving opportunities are first step in energy
conservation and cost saving. In 2006 and 2007, Antam’s gold business unit Pongkor participated
in Energy Audit Program conducted by Energy and Mineral Resources Department (ESDM).

The program facilitates ESDM to provide an incentive to the industry in form of energy audit as
well as energy conservation identification and recommendation. On the other hand, the industry
obliges to examine and conduct study follow up, so it is expected to achieve significant energy
saving not only from cost of financial aspect, but also from the environmental aspect.

In 2008, Antam’s nickel business unit Pomalaa will conduct energy audit and hopefully with the
recommendation, energy intensive ferronickel process may be more efficient, thus, it contributes
advantage to the environment as well as enhancing the Antam’s products competitiveness.

The Search for New Energy Resources


To anticipate of power requirement in the future and considering current operations and business
expansion plan, Antam is trying to find new energy resources. For short-term (4-5 years) requirement,
Antam has identified several energy resources and currently in various implementation phases.
The exploration for new energy resources attempts to apply renewable energy components.

From the three new power resources that are in exploration phase, the agreement with PT Tamboli
Energy has reached the next phase. In September 2007, Antam has signed Power Purchase
Agreement with PT Tamboli Energy for the power purchase of 15 MW (peak load capacity) for 5
years starting 2009. The power supply generated by a low impact hydroelectricity plant hopefully
can reduce up to 3-4% ferronickel production cash cost and also reduce Antam’s carbon footprint.
This hydroelectric plant will be built in the Tamboli River, The regency of Kolaka (about 63 km from
Pomalaa) using run-of-river method. There will be no man-made dam, therefore sustaining the
environment preservation.
32

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SOURCE OF ALTERNATIVE ENERGY


Source Capacity Source of Used at Progress
Energy
PT Tamboli Energy 15 MW Hydro Pomalaa Construction.
Feasibility Study. Expected
completion in 2008.
PLTU 150 MW Coal Pomalaa
Study on IPP (Independent Power
Producer) scheme. Expected
completion in 2008.
PT Poso Energy 90 MW Hydro Pomalaa Feasibility Study

Case Study: Gold Business Unit Pongkor


SOURCE OF ENERGY
The pattern of power use in Pongkor as followed:
AT PONGKOR
• 50% for mining activities
7% • 45% for processing
• 5% for public road lighting

Most of the power source come from PLN (state owned power company) while others from diesel
power (used as thermal oil and standby power generator).

The energy audit result in 2006 showed that there was potential energy saving about 7100GJ per
93% annum (with the no-cost, low-cost and high-cost initiatives). However, as audit report delivered in
November 2007, the possibility of having the energy saving initiative may be started in 2008.
Diesel Oil
National Grid ENERGY CONSUMPTION AT PONGKOR
Source of Energy Consumption 2007 Consumption 2007 (GJ)
National Grid 45,061,760 kWh 162,222.30
Diesel Oil 316,356 liters 11,532.78
Thermal Oil 268,135 liters -
Electricity Generator (back up) 48,221 kWh -

33

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Introduction:
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Case Study: Nickel Business Unit Pomalaa


Ferronickel facilities at Pomalaa consume energy of 750 GWh per year or equal to 90% of total SOURCE OF ENERGY
Antam’s power consumption. As mentioned in 2006 sustainability report, the improvement of AT POMALAA
efficiency in power consumption will be focused on reduction of greenhouse effect emission.
9%

The ferronickel plants currently require about 88 MW power and supplied by Antam’s diesel
31%
power plant, with capacity of 102 MW (as the main power source) and 58 MW (as back up
power source).

One of current power saving efforts is utilizing sludge oil to rotary kiln as additional fuel.

ENERGY CONSUMPTION AT POMALAA 60%


Source of Energy Used at Consumption 2007 Consumption 2007
(GJ) MFO IDO
Marine Fuel Oil Coal
Power Plant 143,033,804 liters 5,441,117
(MFO)
Industrial Diesel Oil
Ferronickel Plant 20,190,216 liters 768,051
(IDO)
Coal Ferronickel Plant 109,049,257 kg 2,835,281

Water
Water is important in mining and metal processing. However, it is also required by the surrounding
community at operational areas and environment to support the ecosystem. Pomalaa and Pongkor
have been re-circulating the water into the system, hence reducing the amount of water taken from
the environment.

Case Study: Gold Business Unit Pongkor


Currently gold mining activities as well as gold ore processing activities no longer use the
water directly from nature. Water required for mining and processing activities is taken from
water re-circulation. The water saving program has been done since 1998. The only domestic
water needed was taken from the nature through well and dug well, with total water extraction
34 2,151.5 m3 in 2007.

WATER RECIRCULATION AT Pongkor


Description Source Amount (M3) Recirculation Amount (M3) Percentage
of recycled
water (%)
Mine recycled water Water from waste treatment plant 5,180,191 • Back Filling 243,012 4.69
• Drilling water into the mine 4,507,959 87.02
Plant recycled water Waste water to tailing dam 898,875 • Tailing Dam to the plant 469,655 52.25
Total recycled water • Waste water from the mine 6,654,643 • Waste water and water from the tailing 5,649,846 84.90
• Waste water from the plant to the dam into the plant
tailing dam

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Although Antam is using water recirculation for mining and processing, in 2007 approximately
3,729,346 m3 water volume was disposed to Cikaniki River (with authorization of local government),
through mining and processing outlets. On the question of why is there disposal of water when
there is no water being taken from the nature can be answered with the availability of water source
as follow:
• Mine outlet: rainwater from settling pond and decant pond, as well as the ground water that seeps
from the mine during mining process.
• Processing Plant outlet: stream of rainwater captured in tailing dam and decant pond.

The above water volume was considered acceptable due to Pongkor’s rainfall could reach
6,000 mm per year.

In 2007, total water saved approximately 6,800,874 m3 (not included rainwater and ground water
from mine site, which volume is assumed equal to volume streamed to the Cikaniki River).

WATER TAKEN FROM THE ENVIRONMENT


Description Source Installed Capacity Usage Total Consumption
(thousand M3/
year)
Inlet 1 Drilling well 75 m3/day Domestic 1.658
Inlet 2 Digging well 10 m /day
3
Domestic 0.493
TOTAL 2.151

TREATED waste water disposal


Description Disposal Destination Water Category Total Disposal
(thousand M3/year)
Mine Treatment Plant Cikaniki River B, C, D 1.953
Cikaret Treatment Plant Cikaniki River B, C, D 1.776
TOTAL 3.729
* Water category is based on the Decree No. 38/1991 from the Governor of West Java on Water Category and Water Quality
Standard.

35
Case Study: Nickel Business Unit Pomalaa
In 2007, the water volume extracted approximately 7,249,271 m3. Water used at plants is being
re-circulated in order to reduce the use of natural water. The water recirculation discharge 940 m3
per hour while plant disposed water discharge 635 m3 per hour.

Currently Antam have built two re-circulation ponds for clean water and dirty water from plants.
The clean water pond is to hold the water overflow from the plant’s cooling system. While the dirty
water pond is to hold the waste from slag cooling process. Currently Antam plans to re-circulate
water used by ferronickel plants, including the construction of liquid waste flow treat diagram.

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Furthermore, there are four environment disposal outlets (check dams) to hold rainwater from mine
surface. The four dams were constructed as rainwater sediment control facility. The discharge
amount from several dams depends on the rainfall.

WATER TAKEN FROM THE ENVIRONMENT


Description Source Usage Total Water Taken
(million M3/year)
Inlet Kumoro River Domestic 5.935
Inlet Huko-huko River Production 1.314
T O TA L 7.249

TREATED WASTE WATER DISPOSAL


Description Disposal Destination Total Disposal
(million M3/year)
Plant Outlet Sea 5.563

Material
Material is the biggest cash cost component in mining and processing activities. Furthermore, the
efficiency of using materials means reducing need for resources. In its activities, Antam attempts
to conserve materials through recycling efforts.

Case Study: Gold Business Unit Pongkor

Materials in gold mining and processing


Total
Material Usage
(thousand tons)
Gold Ore Raw material 389.88
Sodium metabisulphide Cyanide destruction 1.09
NaCN Gold binding 0.53
HCl Carbon leaching 0.44
Lime Maintain/increase pH level 0.33

36 NaOH Maintain pH level 0.19


H2O2 Cyanide destruction 0.11
Others - 0.53

Most of processed materials are still contained within the disposed water, hence the recycle efforts
is conducted to substitute the processed materials. The recycle effort shown from the 469,655 m3
of water being pumped from the tailing dam to the plant (thickener unit) to be used in the process.
Most of the water with CN content is also being pumped from thickener to milling unit with the
purpose to utilize the CN content for cyanide process.

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Case Study: Nickel Business Unit Pomalaa

Materials in Nickel mining and processing


Description Usage Total (thousand ton)
Nickel Ore Ore preparation 1,292
Coal Reductor Reductor 49.76
Limestone Ore preparation 13.60
Anthracite Reductor 12.19
Burnt Lime Refining 2.48
Carbide Refining 1.25
Others Refining 0.35

Most of the waste contains nickel component that can be used as nickel ore substitution. Therefore,
the recycle effort in ferronickel smelting process as follow: 17,845 tonnes of metals from slag
treatment are being re-used in the process. This recycle process can substitute nickel ore as much
as 6.6%. Furthermore, at least 40,385 tonnes of dirt (pellet shape) are being fed back into the
process and substitute nickel ore requirement as much as 3.13 %.

Managing Waste, Avoiding Catastrophe


Furthermore, besides improving the environment management effort to comply with the regulation,
Antam also participates in PROPER (Environmental Compliance Audit) program conducted by
the Ministry of Environment. The last PROPER ranking in 2005 for Nickel Business Unit Pomalaa
and Gold Business Unit Pongkor are blue. It means Antam has implemented environmental
preservation effort as instructed by the regulation. Antam attempts to improve its environmental
management effort to reach the green level in all operational areas before 2010.

Liquid Waste (Effluent)


Antam regularly monitors liquid waste (effluent) quality disposed to environment in order to detect
problem as early as possible and take corrective action immediately. Antam executes effluent
analysis at various sampling points and requests independent laboratory to carry out inspection
every three months. The findings will be submitted to the authorities regularly. 37

From October until December 2007, monitoring result showed the level of total suspended solids
(TSS) in several effluent quality observation points in Pomalaa operational areas, exceeded the
effluent quality standard as required by The Government Environmental Regulation (Peraturan
Menteri LH) no.9/2006 on Waste Quality Standard for Nickel Mining Business and/or Activities. It
happened as result of high rainfall during those months, caused overflow of stockyard resulting in
the waste with suspended dense content. To anticipate in the future, Antam will conduct repairs
and improve the wastewater channel, hence such contamination may not occur.

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Introduction:
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TREATED WASTE WATER QUALITY


Pomalaa Effluent
Parameter Environmental Lowest Highest
Standard
pH level 6-9 7 8.5
Total Suspended Solid 100 3.2 345.6
Copper 2 0 0.0905
Cadmium 0.05 0 0
Zinc 5 0 0.327
Plumbum 0.1 0.005 0.028
Nickel 0.5 0.009 0.056
Chrome Hexavalent 0.1 0.0008 0.022
Chrome Total 0.5 0.0015 0.11
Iron 5 0.002 0.364
Cobalt 0.4 0 0

Pongkor Effluent
Parameter Environmental Lowest Highest
Standard
pH level 6-9 7.03 8.4
Total Suspended Solid 200 3 69
Copper 2 < 0.02 0.28
Zinc 5 0.01 0.19
Chrome Total 1 < 0.02 0.02
Cadmium 0.1 < 0.03 < 0.03
Mercury 0.005 < 0.0005 < 0.0005
Plumbum 1 < 0.01 < 0.01
Arsenic 0.5 < 0.005 < 0.005
Nickel 0.5 < 0.02 < 0.02
Free Cyanide 0.5 < 0.005 0.01
38

Emission
Antam monitors emission quality released to the air to ensure no pollutant above legal limitation
and to detect problem as early as possible. An independent laboratory is involved to do such
inspection every three months. The findings are submitted to authorities on regular basis.

In 2007, the measurement result on all Antam’s operational area did not indicate below the
emission quality standard set by the local and national regulation. This achievement due to various
prevention efforts implemented in Antam operational areas.

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

EMISSION LEVEL
 Parameter Environmental Pongkor Pomalaa  Unit
Standard
Lowest Highest Lowest Highest
NO2 1000 1 71 0.155 44.427  mg/l
SO2 800 1 460 0.43 127  mg/l 
Lead 12 0.03 9 0.004 0.052  mg/l
Particle 350  2 59  0.68 337  mg/l

Solid Waste
Solid wastes usually come from mining activities such as slag and tailing. Tailing is material left
Electrostatic precipitator at ferronickel plant. from the ore separation process from hydrometallurgy process while slag is by-product material
of metal separation from the ore from pyrometallurgy process. Normally slag is a mixture of metal
oxides and used as waste disposal mechanism on metal separation process. Different process
methods result in different tailing and slag.

Case Study: Nickel Business Unit Pomalaa


Gas emission management from ferronickel plants starts from the discharge from drying,
calcinations, smelting and refinery process. The emission control facilities at ferronickel plants are
bag house filter, cyclone and electrostatic precipitator.

Solid waste from nickel smelting plant amounted to 698,060 tonnes of slag and used as filling
materials for road and the beach. The surrounding communities also use slag. The use of slag is
under permission from the Ministry of Environment.

Case Study: Gold Business Unit Pongkor


From underground mining in Pongkor, total tailing volume was 186,271 dmt. Most of the tailing is
being backfilled to the mining stope, which was 135,989 dmt. 96,744 dmt is being pumped to the
tailing dam, and as much as 89.527 dmt to mud collection dump.

Most of the waste materials (the stones with no ore content) are used for mining road and some is
being put back to mine. 39

The tailing produced from processing has been tried as plant agent. The tailing ability as plant
agent depends on the tailing shape; the smaller the granules, the more difficult it is as plant agent
due to bad soil drainage. It is also determined from the tailing content itself. The use of tailing has
been approved by Ministry of Environment.

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Burying the Waste, Saving the Surface


Backfilling has been utilized in underground mining process
for almost 100 years and this technology will likely continue
to be used and perfected in the future. The application of
this technique also allows the disposal of waste from mineral
process. Such application will produce physical and chemical
stability to the environment.

This process has several advantages, such as:


• Tailings are kept underground. As such, negative impacts to
the surface could be avoided. It is also environment friendly
as it does not require a vast tract of land to store the tailings,
the volume of which could be very large.
• Strengthening the base of the mines and improving the mine’s ventilation circuit.
• Preventing the ceiling from collapsing due to excessive air pressure.
• Supporting ore extraction process.

There are also several disadvantages of this method, such as:


• The existence of groundwater pollution risk by the tailings.
• Un-mined mineral components could be dissolved in the tailings
• Mining cycle is delayed.

In view of its environmental and social advantages, Antam utilizes cut and fill underground gold mining process,
implements backfilling method by utilizing the tailings. To reduce the risk of ground water pollution, Antam uses
adhesive materials such as cement at Pongkor.

During the gold mining process, slurry from the plant is processed in the cyanide detoxification unit to eliminate the
existing cyanide. Slurry is then streamed to a thickener facility, where flocculation process takes place to separate
40 solid slurry from the liquid one. The overflow will stream down to the tailing dam, while the thicker part will go into the
backfill dam.

When the mine stope is ready to be filled, the tailings will be mixed with cement in the backfill silo, and then pumped
back into the mine. Unused slurry will go into Fatmawati mud stockpile. This activity is done regularly, as needed.

In 2007, out of 322.260 DMT volume of tailings, as much as 135.989 DMT were being returned into the mining gap. On
average, filling is done on three mine fronts every month.

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Hazardous And Toxic Waste (B3)


Antam various mining processes resulted in various B3 wastes. The government regulates the
handling of B3 waste. Antam applies in-situ processing (using incinerator) and involves professional
B3 waste management service such as PT PPLI and PT WGI to manage waste that Antam could
not process.

Type of Waste Amount Units

Oil, Used Oil and Sludge Oil 1,012,791 Liters


Used Grease 2,539 Kg
Ashes 3,811 Kg
Solid Hazardous and Toxic Waste  
Used packaging, contaminated materials, medical waste and others 21,862 Kg
Used chemical bottles 520 Unit
Used batteries 96 Unit
Liquid Hazardous and Toxic Waste 3,000 Liters

At Logam Mulia, suppliers will take back empty packaging to be managed according to the
regulation.

Greenhouse Gas
Antam also pays attention to the greenhouse gas emission, in line with the global demand to lower
contribution on global warming. Currently, Antam is calculating greenhouse gas effect (GGE). In the
future, Antam expects the amount of GGE released can be independently calculated so reduction
initiatives can be done.

Biodiversity
From 6,047 ha of Pongkor mining area, approximately 2,658 ha or 44% of total area is located in
the Halimun Salak Mountain National Park. This is important for Antam as always gives its best
effort to live harmony with natural environment and surrounding communities. As realization of
Antam’s concern, Antam and Halimun Salak Mountain National Park Agency conduct research on 41
Java Eagle (Spizaetus bartelsi), an endangered species on the red list of International Union for
Conservation of Nature-(IUCN). Even though Antam has no direct impact on protected biodiversity,
flora and fauna survey has been identified species listed in Red List IUCN (2005).

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NUMBER OF SPECIES SURROUNDING ANTAM SITE


Category Fish Birds Other Fauna Flora
Critically Endangered - - - 4
Endangered - - 2 2
Vulnerable 1 1 - 3
Near Threatened - 2 - -
Least Concern 3 51 3 12
Data Deficient 1 - 2 1

Antam also concerns on the environment condition in its operational areas. For example, the
sedimentation problem in Pomalaa operational area is getting worse by the immigrant habit to cut
down mangroves forest.

Mine Closure Plan And Post Mining Activities


Currently Antam’s mine closure program and post mining activities take place at Gebe (nickel,
open pit), Cikotok (gold, underground) and Cilacap (iron sand, open pit).

Mine closure and post mining activities cover the following:


• The rehabilitation of disturbed land. By returning the land to its function and use.
• Revegetation is being done through observing diversity and functions of local species, therefore
emphasize on multicultural replantation.
• Preparation and development of renewable local resources to support post mining activities.

At Cikotok, the post mining activities also involve the community in fruit and forest plantation Reclamation at the closed Gebe nickel mine.
(which used as an opportunity to create new opportunity). Antam offers support in form of training
and provide seeds. The type of tree utilized are mangosteen, mango, rambutan and durian while
for wood producing trees is jenjeng wood.

Environmental Compliance
Although Antam strives for conduct environmental management based on standards and regulation,
42 currently Antam faces claims from local communities in Tanjung Pinang on environmental issues,
which are allegedly by bauxite mining operations at Kijang in 2005. Antam believes the claims will
be settled favorably under applicable law and regulation.

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Care that Goes Beyond Operation Area

Antam Planting Program


In the occasion of United Nation Framework Convention of Climate Change (UNFCCC) in Bali
on December 2007, Antam took part in the effort to reduce global warming by planting as much
as 4,000 trees concurrently at all its operational areas on November 28, 2007. These activities
involved communities surrounding operational area to raise awareness on the threat of global
warming. This event is planned to be held every year.

The tree planting initiative is done concurrently in various Antam’s business units such as:

Planting trees by Antam’s Employees.


Pongkor Gold Mine
The planting of 1,350 fruit plants (rambutan, guava, durian, mango, jackfruit and petai) and 800
forest trees (rasamala, puspa, jamuju, mahogany). Approximately 300 people involved, among
others were employees, community leaders, ordinary people and local government.

Kijang Bauxite Mine


The planting of 850 mahogany trees and 150 eucalyptus trees.100 people involved at Wacopek
East Bintan sub district.

North Maluku Operation: The planting of 400 trees (mango, guava, longan, rambutan, papaya,
jackfruit, nutmeg, cempedak, and papaya). 30 people involved including Antam employees, other
companies, communities and village officials.

Pomalaa Nickel Operations


The planting of 450 trees (glodokan tiang, kayu biti) at Kolaka Sports Center involved more than
300 people.

Gebe Nickel Mine


400 mahogany trees were planted by 70 people.

43
Cikotok Gold Mine
The planting of 400 trees (mango, mangosteen and durian) in Pasir Laban involved 300 people.

Cilacap Iron Sands Mine


The planting of 400 trees (Glodok/Pelindung) in Karang Benda village Adipala sub district involved
about 200 people.

Head Office
Approximately 10,000 mangrove trees are planted at Angke Kapuk protected forest and Soedyatmo
highway. There were about 350 people took part in planting.

The planting was planned in hope to benefit the local community while the type of trees planted
in the greening program target areas carefully selected based on weather condition and the
soil characters.

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Restoring Mangrove Forest in Pomalaa



Mangrove Forest is a very important element in the
coastal area, as a habitat and breeding place to
various coastal animals. Furthermore, its function to
help to lessen water flow, therefore makes the
sedimentation process better. In the area where
mangrove forest is being destroyed for development,
the disruption on sedimentation process and the habitat
function often create problems to the local people.

I n Pomalaa operational Area, South Sulawesi, Antam


faced a specific challenge which was the streaming
of sediment from mining area to the beach caused the beach is covered by red sediment. The area
was formally mangrove forest that was cut down to open settlements and to meet the migrant needs
on woods. The mangrove deforestation reduces the area’s ability to hold back the sedimentation that
stream from Antam’s mining area.

The deforestation also caused the shrinkage of the fish communities in the vicinity. The fishermen
have to go out all the way to middle of the sea to get the amount of fish they need. Most of the local
people blame Antam’s sedimentation as the reason of mangrove deforestation, therefore created
tension between Antam and the surrounding communities.

To shatter their belief that the sedimentation is the reason to the forest extinction and to help the local
community to get their livelihood back and to cut down on the mining activities’ impact, therefore
since 1991 Antam has carried out the mangrove forest planting as part of reclamation activities.

The planting was done along the beach where Antam collaborated with Haluoleo University to get
the plant species, seeding technique, fertilization and the optimal planting season for the area. Antam
44 has its own seeding activities where the seed is taken from the local species within the area. In 2007,
Antam has planted 235,000 mangroves trees on 23.5 ha of coastal land.

Besides planting activities, Antam also educate communities of the mangrove forest function and
benefit for all parties. Because the success in mangrove trees planting, community realized the
importance of mangrove forest. At the end, they took part in Antam’s planting effort.

Antam expects program continues along with Antam’s reclamation activities until mangrove forest
back to its original state.

Supporting the Effort to Preserve Protected Fauna


Antam operational areas are located near to areas with rich biodiversities. Various species in the area are not
just valuable from conservation aspect, but also from economic standpoint. One of Antam’s contributions to
preserve protected species, Antam invited various parties, from leading researchers to national park bureau to
do in-depth studies. As an example of the studies are the research on coconut crab (Birgus Latro) at Yoi Island,
Central Halmahera (see box) and Java Eagle (Spizaetus Bartelsi) at Halimun Salak Mountain National Park.

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Coconut Crab, the Coconut Tree’s Best Friend at Yoi Island


Yoi Island in the Regency of Central Halmahera is located 20
km from Gebe Island. Like Gebe Island, this little island with the
population of 563 people, has abundant marine natural resources.
One of its potential natural resources and the current local favorite
is coconut crab (Birgus Latro).

The large anthropoid – with the length reaching 1 meter and


weight up to 17 kg- is known to climb coconut trees. It is no
surprise that the growth is trailing the spread of coconut plants
in 33 tropical countries.

Coconut crab is well known for its delicious taste and as specialty
dish for the folks from Northern Maluku. Priced at Rp50,000 per kg (up to Rp300,000 when served in restaurants), the
species has high economic potential. The crab is hand captured almost everyday.

However, with the slow growth of coconut crab, the high economic potential may endanger their survival. According
to testimony by the local fishermen, there’s a decrease in the number of coconut crab captured. If previously they
could catch 20 crabs per night, now they are only able to get 5 to 6 crabs and the size are much smaller compared
to years ago.

Currently coconut crab is listed in the protected endangered species according to Government Regulation No. 7/1999
on the plants and animals species preservation. Although in 1983 until 1994 this anthropoid is categorized as rare
species by the IUCN Red List, since 1996 there is deficient data on this animal group. More studies on the lifecycle and
the habitat of this animal need to be conducted.

Realizing the importance of conservation effort and sustainable fishery activities for this species survival, Antam,
working together with the team from Department of Water Resources Management, Bogor Agricultural Institute (IPB)
lead by Dr. Ir. Sulistiono M.Sc., conducted a study on the habitat, population and reproduction pattern of coconut crab
in Yoi Island. 45

As part of Antam’s environment and social responsibilities to the area, we hope the study findings become an input
for the local government to take action in preserving the species. Furthermore, we hope the findings can open ways
for cultivating the species and regulating the catching based on it reproduction pattern, thus, providing an alternative
livelihood and sustainable economic booster for the local community.

This matter is important because the closure of Antam’s mining activities in Gebe Island will significantly reduce the
local government income as well as the local people’s income. (Currently, the mine’s physical closure has achieved
60% and it is estimated that by April 2008, the closure will be completed).

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Social Empowerment
The Key Success Factor of Our Successful Performance

Concerns towards workers, employees and indigenous people are the key success factors
to corporate’s performance
Human resources are among Antam’s most valuable assets. Therefore, Antam strives to provide
them with the best available working environment and conditions. In return, Antam expects its
employees to make meaningful contribution to the growth of Antam.

As a mining company in Indonesia with the vision to becoming a company with an international
standard in 2010, Antam strives to continuously develop the skills of its work force to the highest
level as possible in order the face future challenges.

Recruitment
Antam strives to recruit the best candidates that are highly dedicated to the mining world. The
amount of permanent employees declined in 2002-2007. However, there has been an increase
in non-permanent employees. One of the reasons was because a number of operational areas
such as Gebe, Cikotok and iron sands mines had been closed down as the mine reserves had
been depleted.

EMPLOYEE TURNOVER 2007 NUMBER OF EMPLOYEES


3,300

2,852

60
2,749

2,701

13
11 11 11
6
46
217

209

5 4
136
129

3
1 1 2

04 05 06 07
Recruitment Dismissal/Retired

Jakarta Head Office Permanent


Strategic Business Unit (SBU) Nickel Non-permanent
SBU Gold
SBU Bauxite
SBU Logam Mulia
Geomin Unit

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Employees Welfare
Antam is committed to providing benefits especially to its permanent employees. The benefits
were stipulated in the 2006-2008 collective bargaining agreement between the Management of
Antam and Perpantam and they include cost of living adjustments, work incentives, severance
pay, overtime pay, pension benefits, business trip allowances, medical allowance and year
end bonus.

The pension program includes medical allowances for retirees and their families of three children.
The children who qualify for the program are those who are 25 years old or below, do not have any
source of income and/or are not married.

The employee’s income components include:

No PERMANENT INCOME No NON PERMANENT ALLOWANCE

1 Main salary 1 Reading Allowance

2 Representation Allowance 2 Transportation Allowance

3 Company’s Allowance 3 Non-Practice Allowance

4 Additional Company’s Allowance 4 Regional Allowance

5 Position Allowance 5 Shift Allowance

6 Special Allowance 6 Cashier Allowance

7 Work Performance Allowance 7 Adjustment Allowance

8 Business Unit Allowance 8 non-PHDP Wage Allowance

9 Benefit increase

10 Overtime Allowance

11 Field Allowance

47

Occupational Health and Safety


Occupational health and safety is one of the most important aspects that fall under the responsibility
of both Antam and the employees. It is one of Antam’s top priorities in its efforts to minimize all
types and levels of accidents.

Zero Accident concept is applicable to all employees, partners, people and the environment in
the workplace. In the environment sector, the provisions of Antam’s Quarter Impact Analysis are
implemented at all operational activities. The education on HSE is also routinely held.

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2007 Occupational Health and Safety Performance


Unit Usaha Incident Category TOTAL
Minor Serious Fatal
SBU Nickel 9 4 - 13
Buli & Gee Nickel
11 1 1 13
Operation
SBU Gold - Pongkor 4 - 1 5
SBU Logam Mulia 1 - - 1
SBU Bauxite - Kijang 1 - - 1
Cilacap (post mining) - - - -
Cikotok (post mining) - - - -
TOTAL 26 5 2 33

Total working hour : 15.137.690 hours


Work days lost : 16.710 days

Two fatal accidents took place in 2007, each at SBU Nickel - North Maluku Operation and SBU
Gold - Pongkor. The incidence happened due to the increased intensity of mining operational
activities that contributed to the increase in risk in occupational safety and health.

The tragic accidents fell upon Antam’s mining business partner. Therefore, Antam strives to improve
the workplace safety and health management system, especially for the business partners.

Health Management
Antam is concerned about the medical benefits for its employees.. The medical services provided
for all employees include preventive as well as curative treatments of illnesses/diseases.

Among the proactive efforts undertaken by Antam regarding health management is the education
on serious illnesses for its employees. For example, in February 2007, Antam held a scientific
lecture on HIV/AIDS and illegal drugs. Antam also conducted a lecture and a discussion on Dengue
Fever and Avian Flu in Pomalaa with 379 participants as well as a first aid and survival training for
48
all of its employees.

Diversity and Equal Opportunities


Antam complies with the ILO Conventions number 100 on Equal Remuneration or Equal
Pay for Equal Job and ILO Convention number 11 on No Discrimination in Employment and
Occupation. There has been no report on any form of nepotism or gender, ethnicity, religious or
age discrimination with regards to recruitment, working, training, compensation, allowance or
personnel dismissal issues.

Antam also complies with the ILO number 111 on equal salary for the same job. There is no
discrimination against female or male employees on salary issue. Rewards are given to employees
based on competence and length of service with the company regardless of their gender.

Based on 2007 data, Antam’s work force consisted of 2,701 permanent employees and 136 non-
permanent employees. Out of this number, 200 employees occupy managerial level position, of
which 20 employees (10%) are female.

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

TRAINING AND Improving of Work Force Skills


EDUCATION EXPENSES Antam’s human resources policy requires Antam to develop the competence of an employee
(in billion Rupiah)
in accordance to the requirements of the employee’s position. Antam established a Learning
Center in October 2006 at Jakarta Main Office. In 2007 the center was transformed into Learning
28

and Assessment Center that offers three programs: (1) Competency Development Program (2)
24

Productivity Program (3) Career Development Program.


14

Antam strives to give each employee 12.5 training days every year. In 2007, the average training
days were 10 days. However, Antam was able to improve the productivities of its employees as
10

the training programs were conducted based on a learning need analysis. The performance of
Pongkor, which exceeds its production target, was an example of this productivity improvement.

04 05 06 07
Antam’s 2007 Training Man days:
1. Head office: 2,162
2. SBU Nickel: 1,4285
3. SBU Gold: 7,815
4. SBU Logam Mulia: 1,469
5. SBU Iron Sands: 435
6. Geomin Unit: 1,265

In 2005, Antam spent Rp14 billion in training programs while in 2006 the training spending reached
Rp21 billion. In 2007, out of Rp40 billion training budget, Rp28 billion was realized.

In 2007 more than 1,600 people received education and training that helped them find suitable
jobs and positions within the company. They received hard competencies trainings in accordance
to their roles and soft competencies trainings in communication, negotiation, and political skills,
as well as CSR principles.

The implementation of Antam’s training programs are based on the the needs of the organization.
The participants are chosen based on several considerations such as competency gap/strength
Monitoring activity at Power Plant at Pomalaa. analysis, work analysis and organizational need analysis.
49

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Introduction:
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The training programs provided at Antam are:


1. Leadership Development Programs(AMDP, ALDP).
2. Core Sector (mining, geology and process) Specialist Development Program (ASDP).
3. Meeting Coordination Implementation and Work Unit Consolidation Training.
4. E-learning Program (up to beginners study).
5. Pre-retirement Program.
6. Overseas trainings
7. Case study program.
8. Internship program.
9. Study aid and scholarship (Bachelor, Master, Doctorate degree). Antam Management Development Program.
10. Induction Program (For shift worker, employee candidates)

The results of a survey conducted in 2007 on Antam’s employee work satisfaction after being
enrolled into education and training programs on various related fields are as follow:

Criteria Score Weight Index


Work 77,331 0,137 10,594
Work Benefit 75,900 0,158 11,992
Work Assessment 67,767 0,047 3,185
Supervision/Superior 78,238 0,068 5,320
Team Work 81,867 0,066 5,403
Working Condition 75,136 0,249 18,709
Communication & 77,417 0,069 5,342
Information
Self Development 71,090 0,071 5,047
Organization 73,229 0,136 9,959
1 75,552

The Freedom of Associations and Industrial Relations


50
The employees of Antam are free to join PERPANTAM (Persatuan Pegawai Aneka Tambang /
Association of Antam Employees) or SPSI (Serikat Pekerja Seluruh Indonesia / Union of Indonesian
Workers). The establishment of Perpantam is in agreement with the National Law (National Labor
Law No 21/2000) and International Law (ILP Convention 87 and 98, and Collective Bargaining 99).
The objective of the industrial relations among shareholders, buyers, investors and all stakeholders
related to Antam’s operations, is to achieve a win-win situation.

The management and the labor union of Antam encourage employees to work hard and smart with
the motto “Perpantam for a better Antam” in order to realize Antam 2010’s vision on becoming a
corporation with an international standard.

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Statement from
dr. Guntur Tjora, Head of Perpantam
With the motto “Productivity and Welfare Together” that is inline with Perpantam’s
organizational guidelines “Perpantam for a better Antam”, we strive to create a conducive
and harmonious business environment. Perpantam is not established to attack Antam, but
to help Antam improves its performance.

Perpantam is one of the pillars that support the corporation. Perpantam will not fight for
the workers’ demands without studying the company’s condition. Perpantam will neither
support any policy of the company that does not pay attention to the workers’ condition.

With regards to the workers’ rights and obligations, Perpantam and Antam’s management
are in the same position.

Perpantam adheres to the principles of:


1. Equality
Perpantam and Management are equals in making decision/policy involving the
workers’ rights and obligations.
2. Fairness
Aspirations raised by the workers or policies implemented by the management should
be fair and are acceptable to both parties. For example, if employees request 20 times
increase in salary, Perpantam will view such demand as unreasonable. On the other
hand, Perpantam will view any request to employees to work overtime 5 times more
often in a week by the management for example, as an indecent request. Perpantam
will only fight for aspirations that meet the principle of decency.
3. Balance
To have the balance between rights and obligations with regards to welfare issues.

51
Perpantam has handled several conflicts well. When agreement can’t be reached among
employees, Perpantam and Management, Perpantam will bring the problems to Bipartite,
an independent institution registered at the Department of Labor. This mechanism has
been agreed upon in the Collective Bargaining agreement . This institution will recommend
solution to the problem, and up to this moment, its recommendation has been well received
by all parties.

Furthermore, Perpantam expects:


1. The management to be more sensitive to the employees’ conditions and to be more
responsive to constructive aspirations.
2. The management to increase its cooperation with Perpantam to develop the company
together to achieve a sustainable growth forAntam.

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Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Conflict Resolution
Antam’s Human Resources Policy contains a clause that regulates the process of dispute
settlement. The Collective Bargaining chapter 16 verses 85-95 and chapter 17 verses 96-99 also
regulates this issue. If a disagreement cannot be settled internally, Antam and the employees
could request an arbitration proceeding from a third party. As the last option, the dispute could
also be settled through the Labor Court.

Respecting Local Community Rights


Antam is fully aware and recognizes the sensitivity of the issues of local community rights in
view of the complexity of those rights given the diversity of the Indonesian culture . Through
its community development programs, Antam is continuously learning on how to improve
our interactions with local and indigenous people. Antam’s business units are always trying
hard to engage the local governments and local leaders to get their support on the company’s
community development program.

Antam is committed to care for its human resources, the workers, staff, indigenous people as
well as the community surrounding the operation areas. It is a manifestation of the company’s
appreciation to those who are behind Antam’s progress and success.

ORIGIN OF EMPLOYEES 2007

SBU Gold Pongkor SBU Bauxite Kijang SBU Nickel Pomalaa and
North Maluku Operations

23% 49% 22% 35%

52

77% 51% 43%

From Nanggung Village, From nearby regions Southeast Sulawesi


Pongkor (Kijang and Riau Islands)
Other Sulawesi regions
Outside Nanggung Village, Outside Riau Islands
Pongkor Outside Sulawesi

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Implementing Human Rights Through


Commitment And Education
Discrimination is a violation to Human Resources Policy and code of
conduct

Human rights concerns are important issues that require Antam’s special attention since Antam’s
business operations deal directly with people and communities., Commitments to respect Human
rights have been campaigned globally. Human rights issue is also stated in Antam’s code of
conduct chapter 1 on Equality and Respects toward Human Rights.The establishment of GCG
Committee, which directly reports to the Board of Commissioner, could also be interpreted as
Antam’s commitment toward human rights issues.

Implementation of human rights in Antam is based on the company’s human resource policy, code
of conduct and collective bargaining agreement. All of them refer to the national and international
arrangements.

In its code of conduct, Antam ensures that there should be no human rights principles violation
in all of its operational activities. Among the issues that are discussed in the code of conduct are
rights equality, non-discrimination, freedom of association, no children workers or forced labor and
social protection

Human Rights in Antam’s Code of Conduct


Equality in a work place will stir the spirit among employees to give the best to the company that in
turn will increase productivity and efficiency of the workforce. By adhering to this principle, Antam
believes that discrimination incident will not took place in the company.

With regards to supplier relationship, Antam requires the inclusion of human rights articles in
the working contracts with all partners and suppliers. The partnership will only be established
once they undergo a selection process and the relationship with suppliers will be based on
ethical principles.

Policy on Child Labor and Forced Labor


Antam is in compliance with the Indonesian Regulation on Labor as well as with the International
53
Convention related to child labor and forced labor. The minimum age of employees as stated in
Antam’s Collective Bargaining Agreement is 18 years old and the relationship between employees
and company has to be beneficial to both parties, and not forced.

Education Program on Human Rights


The human rights education begins on the first day of work through induction regarding Collective
Bargaining Agreement which contained the rights and obligations of the company, Antam’s
employees and the environment.

The socialization of code of conduct to Antam’s employees and partners is done continuously,
therefore the respects to human right principles can be maintain at highest standard.

To monitor many aspects related to human resource and human rights, Antam created Nomination,
Remuneration and Human Resource Development Committee. Through these efforts, Antam
oversees the implementation of human rights principles, so that any incidents of human rights
violation against employees and the surrounding community can be prevented from occurrence.

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Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Building Sustainability Together with


Community
Antam implemented CSR long before CSR was campaigned globally

Antam has implemented corporate social responsibility programs for a long time with satisfactory
results. Antam continuously studies and implements issues that are related to corporate social
responsibility towards the community, especially those surrounding Antam’s mine site and
business operation.

One of the CSR embodiments is put forth in various activities as summarized in Antam’s
CSR program. The program covers activities in social, environment, human resource and
economy sectors.

By applying the “beyond compliance” principle, Antam’s current and future CSR programs have
and will go beyond the compliance of Law No. 40 year 2007 on Corporation regarding CSR.

Education is one of the main focus areas of


CSR Program Budget Antam’s CSR initiatives.
(In billion Rupiah)
Program 2006 2007* % Increase
Community Development 15 37 150
Environmental Development 11 8 (27)
Partnership 5 10 108
TOTAL 31 55 78
*The 2007 budget has not entirely included the Natural Preservation element (as part of CSR in accordance to PerMen
BUMN 2007)

In one of the details, Antam’s CSR programs on social sector are put forth in the implementation COMMUNITY DEVELOPMENT
of Community Development (ComDev) Program, Partnership Program (PK) and Environment BUDGET ALLOCATION 2007
Management (BL). The programs are applied to all of Antam’s operational area, from SBU Bauxite 8%
Kijang in Riau islands, SBU Gold Pongkor in Bogor, main office, UB Geomin and SBU Logam 3%
Mulia in Jakarta, SBU Nickel Pomalaa in Southeast Sulawesi, SBU Nickel North Maluku as well as
12%
54 Antam’s exploitation and exploration areas.

The CSR activities in social economy sectors are:

Community Development (ComDev) and Environment Development


Antam carries out these programs to help the government in their effort to improve the welfare of
77%
the community surrounding the operational areas so they can lead a prosperous and independent
life together with the company as it grows. ComDev and Environment Management program
SBU Nickel
is inseparable from the company’s operational activities. Antam’s Community Engagement is
SBU Gold
included in its ComDev program.
SBU Bauxite
Head Office,
Meanwhile, Environment Development is a program to empower the social economic condition of SBU Logam Mulia and
the community in the operational area by using allocated budget from company’s profit. Geomin Unit

PARTNERSHIP PROGRAM
BUDGET ALLOCATION 2007
8%
43%

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43%
Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

ENVIRONMENTAL DEVELOPMENT The Community and Environment Development activities that had been done and are currently
BUDGET ALLOCATION 2007 on-going are:
1. Education
41% 2. Health Improvement
21%
3. Public Facilities
4. Religious Facilities
5. Natural Disaster
8%
6. Environment Preservation
7. Active Involvement from community

30%
Overcoming malnutrition
One of the routine programs at SBU Gold - Pongkor in 2007 was to support 30 children under 5
SBU Nickel years old with malnutrition problem. The program was implemented based on the data provided
SBU Gold – Pongkor by the village officials and community leaders. This program provided the children with extra meal,
SBU Bauxite immunization, milk, green bean and other needs for 6 months, and a team from Antam and Village
Head Office, Integrated Service Unit (UPTD) monitored the development.
Geomin Unit,
Cikotok and Cilacap
Clean Water Facilities Construction
Clean water is an absolute necessity for the community. For that reason, Antam built Clean
Water Facilites (SAB) to improve the life quality of the surrounding communities. Clean water
facility has been constructed in SBU Gold - Pongkor, SBU Nickel - Pomalaa and SBU Nickel
- North Maluku Operation.

At SBU Gold - Pongkor, water from the water spring in Cileles Halimun Mountain is streamed down
for 25 km to Cisarua and Malasari Village using bamboo pipes. The direct benefit from the SAB is
now experienced by 2000 people in the area. SAB in Pongkor is a collaboration effort between the
community, government and Antam.

The parties who had been involved in the joint-cooperation contributed to the success of
creating the Rp 1 billion clean water facility. Antam’s contributions were in form of raw materials
and funds for a total amount of Rp900 million. The community provided manpower and self
funding for a total amount of Rp100 million, and the local government acted as the coordinator
of the stakeholders interests. 55

The local government and the community are responsible for the maintenance of the SAB facility
in Ulu-ulu. They charge Rp1,000 per family as SAB maintenance fee.

Infrastructure Development
In addition to clean water facilities, Antam also pays attention and accommodate other facilities
that are deemed important and can improve the quality of life. Antam has built facilities such as
roads, schools, bridges and houses of worships in accordance to the local community needs.

At Antam’s operational areas, the construction of public facilities and infrastructures, either
new buildings or repairing the existing facilities, has become routine. In 2007, Antam has built
roads, bridges, worship houses, repaired school buildings, renovated the resident’s houses
and many others.

Antam helps to build


worship places at Pomalaa.

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Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Revegetation-Green Antam Program


Mangrove Forests in Indonesia have been experiencing degradation from year to year. In 2005,
there were only 1.5 million hectares of Mangrove Forests, compared to 3.7 million hectares in 1993. COMMUNITY DEVELOPMENT
About 73% of the forests fall under damaged category. This situation is very dreadful considering BUDGET ALLOCATION 2007
Mangrove Forests are vital to the environment. Locally, they act as the ecosystem provider that 8%
supports life, while globally, they have very important roles to lessen global warming. As part 3%
of Antam’s concerns to the poor condition of the country’s mangrove forests, Antam planted
12%
10,000 trees at Angke Kapuk Protected Forest in December 2007. The program was carried out
in collaboration with Jakarta Agriculture and Forestry Agency. Antam is planning to continue the
program in the future.

Medical Equipment Aid for Senior Home Antam aids victim of Gamkonora Mountain
eruption at West Halmahera.
In the business areas where Antam has entered post-mining phases, Antam continues to be
77%
concerned about the well being of the surrounding communities. Antam intends to help build
communities that are independent and possess good quality of life. One of ComDev’s post-mining
SBU Nickel
programs in Cilacap in 2007 was to care for the senior citizens. Antam provided senior homes with
SBU Gold
medical supplies such as medications, mattresses, blankets, bed sheets and others. Caring for
the senior citizen is form of Antam’s commitment to improve the quality of community health. SBU Bauxite
Head Office,
SBU Logam Mulia and
Community Involvement Geomin Unit
Antam actively participates in local development and strives to support local government
development policy through synergical CSR programs that are called Trimitra (Antam – Local
Government - Community). Trimitra facilitates the meetings and discussions for local development
between the company, community and local government. Such meetings are called Development PARTNERSHIP PROGRAM
Planning Convention (Musrenbang). Discussions on community needs and their realization plans BUDGET ALLOCATION 2007
take place at the Musrenbang. 8%
43%
Natural Disaster Aid
Natural disasters which occurred in several parts of the country were also assisted by the program.
Antam sent aids to the victims of these natural disasters in form of foods, medicines and medical
services. Antam also sent out rescue teams to assist the people suffering from the disasters. 43%

Several areas that suffer natural disaster and are assisted by Antam’s Environmental Development
56 Program are flood over Jakarta at the beginning of 2007, the eruption of Gamkomora mountain
in North Maluku, flood and landslide in Morowali, central Halmahera and earthquakes in West 6%
Sumatra, Yogyakarta and Bengkulu.
Managed through the
Ministry of State Owned Enterprises
Partnership Program Head Office and
It is a program to empower small businesses to become strong and independent entities by using Cilacap
the fund from the company’s profit. The program provides loans for micro, small and medium SBU Nickel
business (prioritizing those next to the operational area) with small administration fee that has to SBU Gold
be returned in installment.

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Snapshot of Antam’s CSR Program

ENVIRONMENTAL DEVELOPMENT
SBU Nickel Pomalaa
BUDGET ALLOCATION 2007

41%
21% Seaweed Partnership Program

This program was launched in 2005. It was initiated by the PKBL team of SBU
8% Nickel Pomalaa by conducting a survey on the economic potential of the areas
surrounding the mine. The existing seaweed cultivation groups were provided
with additional financial capital for worker, seed, nylon rope and building wood
30% platform. They were also given additional training on seaweed cultivation and
processing.

SBU Nickel
• Amount of cultivation group: ± 25 groups @ 20-50 people
SBU Gold – Pongkor
• Production Capacity: 5-17 ton per group (the demand can reach up to 100 ton)
SBU Bauxite
• Price per ton: Rp6,500,000 to Rp7,500,000
Head Office,
Geomin Unit, • Exports to Japan, China, USA, etc (indirectly, through buyers from other region)
Cikotok and Cilacap
• Cultivation Period: Harvested every 45 days.

Seaweed is one of the most valuable and competitive products of Southwest Sulawesi, especially the Kolaka
regency. Based on a research on this business sector, the sea in this area is one of the three seas in Indonesia
that are most suitable for seaweed cultivation.

Illiterate Free Community Movement (Gemasbastara) Program

The success of illiteracy elimination program in the mining and regency


of Kolaka area were the result of strong collaboration between The Aneka
57
Tambang Women Association (PWAT) and Kolaka Education Agency. The
first batch program was held in September until December 2007. Total
participants were 208 people in 7 villages.

The local government also supported and socialized this program. Learning
activities included reading, writing and counting as well as practical know-
how skills such as sewing and cooking. The program’s instructors were
school teachers and UPTD Kolaka Sub-district Education Agency. This was
the first time such a program was carried out by Antam, and due to its
success, it will be continued in the coming years.

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Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Drs.H.Buhari Matta.M.S
Regent of Kolaka, Southeast Sulawesi

The physical developments undertaken by


Antam have moved the economy and improved
the community’s welfare.

Antam’s presence at Regency of Kolaka is truly


felt. While Antam’s CSR programs are stipulated
by law, Antam’s sense of moral and social
responsibilities cause Antam to continuously
develop the communities together with the
local population.

The physical development contribution that was done by SBU Nickel Pomalaa, such as
public and infrastructure facility, education, health improvement and worship houses
facilities, has directly or indirectly move the economy of the local people.

The benefits of Antam’s activities in health matters such as free medication and harelip
operation can be felt by the local community and the people in general.

Antam also supports the Home Renovation program for the needy people conducted
by the Kolaka local government. There were at least 7,000 homes that received floor
renovation program and 800 homes that received disposal duct installation. Antam
provided 20,000 pack of cement for this program.

The Illiteracy elimination program supported by Antam has also reaped great success.

58

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SBU Gold Pongkor

Ivory Stone Sculpture Partnership Program

Although Udin has only officially partnered with Antam since 2006,
Antam has given special attention to Udin since 2002 for his business
and talent in the ivory stone craftsmanship.

Since he was small Udin, who grew up in Pongkor area, has had
a talent in the art of ivory stone carving, a stone which carries
unique characteristics. He refined his artistic talent at art school in
Yogyakarta. He is also a talented painter.

Udin first joined an exhibition with Antam at INKOWAPI (The Association of Indonesian Cooperatives and
Female Entrepreneurs) in 2006, and he won the first place for Best Craftsmanship. In Indonesia Expo and
Kowani fair in 2006, his work was purchased to be used as the present for the winner of Adipura Award from
the minister of Evironment. In the INACRAFT exhibition in 2006, President Susilo Bambang Yudhoyono bought
his work directly.

Partnering with Antam means more than expanding market opportunities. It can also develop the talent
and art skills of local youngsters. The partnership provides not only financial assistance but also moral and
knowledge support.

Free Medication Program

59
Partnering with doctors, this once a year free medication program
has truly been beneficial to the community. Antam brings the
doctors to visit a village’s public hall, where the free medication
program has been announced before hand. In one day work, the
doctor normally can handle up to 2,000 patients.

However, the local community wishes for an increased frequency


of the doctor’s visit. They also wish that the doctors do not only
come to the public hall, but also to reach the people in villages.
The reason that due to the long distance between the villages and the public hall, the transportation cost can
go beyond the medication fee, especially if the patient suffers from heavy illness.

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Introduction:
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Responsibilities towards Our Products


Antam offers safe products and provide adequate safety information
Antam’s products such as nickel ore, ferronickel, bauxite and iron sands, with the exception of
gold or silver bars produced by SBU Logam Mulia, are not being directly used by the general
consumers, therefore the exposure to human safety and health is relatively minimal.

Antam’s gold and silver products are not listed in the hazardous material list, which is based
on the Government Regulation no. 74 year 2001 dan Ministry of Labor regulation No 187 year
1999. Antam, however, strives to take responsibilities beyond what is required by the law. Antam
attaches safety and health information and Safety Data Sheet (SDS) on its ore packages to ensure
that any possibility of negative impacts on human health can be prevented.

Product And Customers’ Trust


The marketing department is responsible for the shipments of Antam’s products to its customers
based on the following principles: on time delivery, compliance to specification and quick response
in order to ensure costumers will get the best service. A survey conducted by the marketing
department on customers’ satisfaction in 2007 showed the score on customer satisfaction index
reached 80 (in the scale of 100).

Simple Life Cycle Of Mineral Products

• Tailing
• Overburden
Waste (Recyclable)
Effluent, mainly: Processing of
Gold Ore into
Processes
• Cyanide
• TSS Dore Bullion Managed by
• Emission
Antam
Processing of
Dore Bullion
into Underground Emission Metal Processing
Emission Mine
Gold & Silver Industrial Industry
Bar & End Raw Material:
Processing
Product Gold End
Nickel Ore Gold, Silver
Nickel
Underground Into Ferronickel Product
60 • Overburden
Reserve Ferronickel Aluminium Use
• Landscape
• Run Off Water
• Air Ambience Open Pit Open Pit
Mine Mine Production
Initial
Bauxite Process
Initial
Process Shipment
Shipment
End Product
• Overburden
• Landscape
• Run Off Water
• Air Ambience

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Nickel Lifecycle
Nickel is a white-silvery metal that is hard but can be shaped easily. Because of its flexible nature
and unique characteristics such as its unchanging character when being exposed to oxygen, its
resistance to oxidation and its ability to maintain its original character under extreme condition,
nickel is commonly used for commercial and industrial applications.

Nickel is mainly used in the stainless steel industry to enhance the quality of the steel such as by
increasing the anti-corrosive and malleability characteristics of the alloy.

Ferronickel is the main material to make austenitic stainless steel (SS 200/300) that is widely used
by various industries. Besides stainless steel, nickel is also used in batteries, coins, and many
other applications.

Gold Lifecycle
Gold is mined using open pit mine or underground mine methods. In 2007 Gold production in
Indonesia was estimated at 171 mt out of the world’s total production of 2,444 mt (about 7%).
Antam’s gold mines in Pongkor and Cikotok are underground gold mines.

At Antam’s Pongkor mine, gold and silver are found bonded to each other within the ore. The
material that contains gold, or the gold ore, is then sent to a processing plant to extract dore
bullion, which contains 6-15% gold and 90-92% silver. The dore bullion is then sent to SBU Logam
Mulia to be refined into fine gold and silver bars.

Aluminum Lifecycle
Aluminum is a metal that is commonly found and used in various applications that range from
window or door frames, car engine components to space shuttle.

Bauxite is the main source of ore for the production of aluminum. It was named after the village
where it was found, Les-Baux-de-Provence in Southern France, by a French geologist, Pierre
Berthier. After being mined, Antam’s bauxite ore is washed, filtered and then kept in two-storage,
before being sold to alumina producers in Japan and China.
61

From top to bottom:


Ferronickel, nickel ore, gold products, bauxite ore

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Cross Reference with


GRI-G3
Economics Performance Indicators

Economics Performance Page

EC1 25-27
Economic value that is directly generated and distributed, including
revenues, operating
Costs, employee compensation, donations and other community investments,
retained earnings, and payments to capital providers and governments.

EC2 Not reported


Financial implications and other risks and opportunities for the organization’s
activities due to climate change.

EC3 25-27
Coverage of the organization’s defined benefit plan obligations.

EC4 No financial aid from


Significant financial assistance received from the government. government

Market Presence

EC5 Not reported


Range of standard entry level wages compared to local minimum wages at
the area of operation.

EC6 27
Policy, practices, and proportion of spending on local suppliers at the area
of operation.

EC7 52
Procedures for local hiring and proportion of senior management hired from
the local community at the area of operation.

Indirect Economics Impact

EC8 27
Development and impact of infrastructure investments and services provided
primarily for public benefit through commercial, in-kind, or pro bono
engagement.

EC9 Not reported


Understanding and describing significant indirect economic impacts,
including the extent of impacts.

62

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Environmental Performance Indicators

Materials Page

EN1 36
Materials used by weight or volume.

EN2 35
Percentage of the use of recycled materials.

Energy

EN3 33
Direct and indirect energy consumption from primary energy source.

EN4 34
Indirect energy consumption by primary source.

EN5 Not reported


The amount of energy saved due to conservation and efficiency
improvements.

EN6 No product relevant


Initiatives to provide energy-efficient or renewable energy based products to this category
and services, and reductions in energy requirements as a result of these
initiatives.

EN7 34
Initiatives to reduce indirect energy consumption and the achieved
reductions.

Water

EN8 35-36
Total water consumptions by source.

EN9 35-36
Water consumption that significantly affect the water sources.

EN10 35
Percentage and total volume of water recycled and reused.

Biodiversity

EN11 31, 41
Location and size of land owned, leased, managed in, or adjacent to protected
areas and areas of high biodiversity value outside the protected areas.

EN12 41
63
Description of significant impacts by activities, products, and services upon
the biodiversity in protected areas and areas of high biodiversity value outside
protected areas.

EN13 31
Protected or restored habitats.

EN14 41, 44, 45


Strategies, current actions, and future plans for managing impacts on
biodiversity.

EN15 42
The number of IUCN Red List species and national conservation list species
with habitats in
Areas affected by operations, by level of extinction risk.

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Emissions, Effluents, and Waste Page

EN16 Not reported


Total direct and indirect greenhouse gas emissions by weight.

EN17 Not reported


Other relevant indirect greenhouse gas emissions by weight.

EN18 Initiatives to reduce greenhouse gas emissions and reductions 41


achieved.

EN19 Not reported


Emissions of ozone-depleting substances by weight.

EN20 Not reported


NO, SO, and other significant air emissions by type and weight.

EN21 35-36
Total water discharge by quality and destination.

EN22 41
Total weight of waste by type and disposal method.

EN23 Not reported


Total number and volume of significant waste spills.

EN24 No hazardous waste


Weight of transported, imported, exported, or treated waste deemed transported aboard
hazardous under the terms of the Basel Convention Annex I, II, III, and VIII,
and percentage of transported waste shipped internationally.

EN25 Not reported


Identity, size, protected status, and biodiversity value of water bodies
and related habitats significantly affected by the reporting organization’s
discharges of water and runoff.

Products and Services

EN26 42-45
Initiatives to mitigate environmental impacts of products and services, and
the extent of impact mitigation.

EN27 Most of product


Percentage of products sold and their packaging materials that are reclaimed shipped in bulk
by category. shipment

Compliance

EN28 42
64 Monetary value of penalties and the total amount of expenses that arise from
sanctions due to non-compliance to environmental regulations

Transport

EN29 60
Significant environmental impacts due to transporting of products and other
goods and materials used for the organization’s operations, and transporting
members of the workforce.

Overall

EN30 30
Total environmental protection expenditures and investments by type.

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LABORS PRACTICES AND DECENT WORK PERFORMANCE INDICATORS

Employment Page

LA1 46, 52
Total workforce by employment type, employment contract, and region.

LA2 46
Total number and rate of employee turnover by age group, gender,
and region.

LA3 26, 47
Benefits provided to full-time employees

Labor/management Relations

LA4 Not reported


Percentage of employees covered by collective bargaining agreements.

LA5 Not reported


Minimum notice period(s) regarding operational changes, including whether
it is specified in collective agreements.

Occupational Health and Safety

LA6 Not reported


Percentage of total workforce represented in formal joint management–worker
health and safety committees that help monitor and advise on occupational
health and safety programs.

LA7 48
Rates of injury and fatalities, lost days, and absenteeism by region.

LA8 48
Education, training, counseling, prevention, and risk-control programs in
place to assist workforce members, their families, or community members
regarding serious diseases.

LA9 Included in collective


Health and safety topics covered in formal agreements with labor unions. agreement

Training and Education

LA10 49
Average hours of training per year per employee by employee category.

LA11 50
Programs for skills management and lifelong learning that support the
continued
Employability of employees and assist them in managing their career.
65
LA12 Not reported
Percentage of employees receiving regular performance and career
development reviews.

Diversity and Equal Opportunity

LA13 52
Composition of governance bodies and breakdown of employees per
category according to gender, age group, minority group membership, and
other indicators of diversity.

LA14 Not reported


Ratio of basic salary of men to women by employee category.

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Human Rights Performance Indicators

Investment and Procurement Practices Page

HR1 Not reported


Percentage and total number of significant investment agreements that include
human rights clauses or that have undergone human rights screening.

HR2 Not reported


Percentage of significant suppliers and contractors that have undergone
screening process based on human rights principles that have been
implemented.

HR3 50, 53
Total hours of employee training on policies and procedures concerning
aspects of human rights that are relevant to operations, including the
percentage of employees trained.

Non Discrimination

HR4 No decimation case


Total number of incidents of discrimination and actions taken.

Freedom of Association and Collective Bargaining

HR5 50-52
Operations identified in which the right to exercise freedom of association
and collective actions taken to support these rights.

Child Labor

HR6 53
Operations identified as having significant risk for incidents of child labor, and
measures taken to contribute to the elimination of child labor.

Permanent and Temporary Labor

HR7 Not reported


Procedures identified as having significant risk for existence of permanent
and temporary labor, and measures to contribute to the elimination of
temporary labor.

Security Practices

HR8 Not reported


Percentage of security personnel trained in the organization’s policies or
procedures that relevant to human rights aspects and work procedures.

INDIGENOUS RIGHTS

66 HR9 No case claim on


Total number of incidents of violations involving rights of indigenous people indigenous conflict
and actions taken.

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Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

SOCIETY PERFORMANCE INDICATORS

Community Page

SO1 54-59
Nature, scope, and effectiveness of any programs and practices that assess
and manage the impacts of operations on communities, including the start of
operation, during the operation phase, and at the end of operation.

Corruption

SO2 Not reported


Percentage and total number of business units analyzed for risks related to
bribery and corruption.

SO3 Not reported


Percentage of employees trained in organization’s anti-corruption policies
and procedures.

SO4 20
Actions taken in response to incidents of corruption.

Public Policy

SO5 17
Description on general policy and contribution on the participation in public
policy development and lobbying.

SO6 Antam does not


Total value of financial and in-kind gains as the results of contributions to receive financial
political parties, politicians, and government related institutions. benefit form non-
operational activities

Anti Competitive Behavior

SO7 No anti-competitive
Total number of legal actions for anticompetitive behavior, anti-trust, and case
monopoly practices and their outcomes.

Compliance

SO8 No anti-competitive
Monetary value of significant fines and total number of non-monetary penalty
sanctions for noncompliance with laws and regulations.

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Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Product Responsibility Performance Indicators

Customer Health and Safety Page

PR1 60
Life cycle stages in which health and safety impacts of products and services
are assessed for improvement, and percentage of significant products and
services categories subject to such procedures.

PR2 No case claim on


Total number of incidents of non-compliance with regulations and voluntary health and safety of
codes concerning health and safety impacts of products and services during product
their life cycle, by type of outcomes.

Product and Service Labeling

PR3 60
Type of product and service information required by procedures,
and percentage of significant products and services subject to such
information requirements.

PR4 No case claim on


Total number of incidents of non-compliance with regulations and product information
voluntary codes concerning product and service information and labeling,
by type of outcomes.

PR5 60
Practices related to customer satisfaction, including results of surveys
measuring customer satisfaction.

Marketing Communications

PR6 Not reported


Programs that support the adherence to laws, standards, and voluntary
codes related to marketing communications, including advertising,
promotion, and sponsorship.

PR7 No case to
Total number of incidents of non-compliance with regulations and voluntary marketing
codes concerning marketing communications, including advertising, communication
promotion, and sponsorship by type of outcomes.

Customer Privacy

PR8 No case to
Total number of substantiated complaints regarding breaches of customer information security
privacy and losses of customer data.

Compliance

68 PR9 No case to product


Monetary value of significant fines for noncompliance with laws and provision
regulations concerning the provision and use of products and services.

Sustainability Report 2007 www.antam.com


Policy, Corporate Governance and Management System Sustainability Performance Cross Reference with GRI – G3 Corporate Information

Corporate Information
Commissioners, Directors and Senior Staff Rinanti Agnes Arsadjaja Senior Manager Operations
Controlling
Board of Commissioners Surianto Senior Manager Tokyo
Wisnu Askari Marantika President Commissioner Representative
Suryo Suryantoro Commissioner
Suharno Senior Manager Human
Supriatna Suhala Commissioner
Resources Management
Irwandy Arif Independent Commissioner
Syafri Isman Senior Manager Internal Audit
Board of Directors Service Delivery
D. Aditya Sumanagara President Director Tuhiyat Senior Manager Accounting
Alwin Syah Loebis Operations Director and Budgeting
Kurniadi Atmosasmito Finance Director Tantiyo Budi Senior Manager Treasury and
Darma Ambiar Development Director Financial Engineering
Syahrir Ika General Affairs and Human
Resources Director Business Unit Executives
Denny Maulasa Senior Vice President of Nickel
Corporate Internal Audit Mining Business Unit
Tuti Kustiningsih Senior Vice President Winardi Senior Vice President of Gold
Internal Audit Mining Business Unit
Robinson Tampubolon Vice President of Logam Mulia
Corporate Secretary Precious Metals Refinery Unit
Bimo Budi Satriyo Senior Vice President Lukman Alie Vice President of Bauxite Mining
Corporate Secretary Business Unit
Widyo Soesilo Vice President of Unit Geomin
Head Office Senior Managers
Achmad Djamalilleil Senior Manager Information
Technology Group Business Units
Agus Yulianto Senior Manager Environment NICKEL MINING BUSINESS UNIT
and Post Mining Pomalaa Nickel Mine and Ferronickel Plant
Ari Karnalin Senior Manager Learning Jl. Jend. Ahmad Yani No. 5
and Assessment Pomalaa, Kolaka 93652,
Sulawesi Tenggara
Bachtiar Maggalatung Senior Manager Program
Ph. (62-405) 310 171
Management Office
Fax. (62-405) 310 833
Eko Marthias Senior Manager Risk
Management North Maluku Operations Office
Hari Widjajanto Senior Manager Corporate P. Buli, Maba, Halmahera Tengah
Strategic Development Group Ph. - Fax. (62-21) 781 2736
Hikmat Gunantara Senior Manager Legal and
Compliance Makassar Office
Ibrahim S. Corporate Social Jl. Dr. Sam Ratulangi No. 60
Responsibility Group Makassar 90122
Sulawesi Selatan
M. Basir Senior Manager Supply Chain
Ph. (62-411) 872 234, 871 648, 872 012
Management Group 69
Fax. (62-411) 872 237
Pim Premono Senior Manager Marketing and
Customer Support Group

www.antam.com Laporan Keberlanjutan Antam 2007


Introduction:
A Closer Look at This Report Letter from the Board of Commissioners Letter from the Board of Directors Corporate Profile: Introducing Antam

Ternate Office Name of Corporation


Jl. Batuangus No. 11 Perusahaan Perseroan (Persero) PT Aneka Tambang Tbk or PT Antam Tbk
Ternate 97727, Maluku Utara
Ph. (62-921) 22221, 21686
Fax. (62-921) 22819 Founded
July 5, 1968
GOLD MINING BUSINESS UNIT
PO Box 1, Pos Nanggung Authorized Capital
Bogor 16650, Jawa Barat
Rp3,800 billion
Ph. (62-251) 369 999
Fax. (62-251) 681 543
e-mail : gold.pongkor@antam.com Issued and Fully Paid Capital
Rp953.8 billion
LOGAM MULIA PRECIOUS METALS
REFINERY
BUSINESS UNIT Ownership
Jl. Pemuda - Jl. Raya Bekasi Km. 18 Government of the Republic of Indonesia 65%
Pulogadung, Jakarta 13010 Public 35%
Ph. (62-21) 475 7108
Direct marketing (62-21) 478 65492
Line of Business
Fax. (62-21) 475 0665, 296 3043
e-mail: logammulia@antam.com A leading Indonesian diversified mining and minerals processing company,
lm@logammulia.com Antam’s businesses are vertically intergrated from exploration and mining
through to processing, marketing, and trading.
BAUXITE MINING BUSINESS UNIT
Jl. Bintan Kijang
Tanjung Pinang 29151, Kepulauan Riau Contact Us
Ph. (62-771) 61177, 61520 PT ANTAM Tbk
Fax. (62-771) 61921 Gedung Aneka Tambang
Jl. Letjen TB Simatupang No. 1, Lingkar Selatan, Tanjung Barat
GEOMIN UNIT
Jakarta 12530
Jl. Pemuda No. 1
Pulogadung, Jakarta 13210 Indonesia
Ph. (62-21) 475.5380
Fax (62-21) 475 9860 Tel : (62-21) 789-1234, 781 2635
e-mail : geomin@antam.com Fax : (62--21) 789-1224
E-mail : corsec@antam.com
ANTAM TOKYO REPRESENTATIVE OFFICE
New Aoyama Building, East 1507
1-1, Minami Aoyama, 1-Chome
Minato-ku, Tokyo 107-0062, Japan
Ph. (03-3423) 8031
Fax. (03-3423) 8033

For more information please visit our website www.antam.com.


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