Abstract
The Pongkor Gold mine is under Production Operation Permit until 2031 while existing feasibility study stated that Pongkor gold Mine only have economical number until 2025 with ore volume in 1.5 million wmt and ore grades above 4 gpt. Pongkor Gold Mine has resources in low-grade gold ore (below 4 gpt) in 1.9 million wmt with the grades is 3.61 gpt. Having a gap period between mining permits (until 2031) and the latest feasibility study (until 2025) and abundant resources in low-grade gold ore, provides research opportunities to finding how to formulate business strategy level for Pongkor Gold Mine in order to maximize gap period by processing low-grade gold ore. This study started with business situation analysis, with VRIO and Internal Factor Evaluation (IFE) Matrix are conducted for internal analysis, while PESTLE (Political, Economic, Sociocultural, Technological, Legal, and Ecological) analysis, Porter’s Five Forces framework and External Factor Evaluation (EFE) matrix are conducted as external environment analysis. The result shown Pongkor Gold Mine in region V in internal-external (IE) matrix, the region indicated that hold and maintain strategies are suitable for Pongkor Gold Mine. Study continued with Porter generic competitive framework to define the strategy that most suitable with Pongkor Gold Mine condition. The result shown cost leadership strategy is the most suitable strategy with the detailed strategy are (i) implement a cost reduction program every year, (ii) substitute retired organic workers (permanent Employee) with outsourced or contracted workers, (iii) limiting investment only to things that have a direct impact on revenue and (iv) long-term contract in heavy equipment. The impact of these strategies will calculate in financial feasibility study. Financial feasibility study uses financial criteria of Net Present Value (NPV), Internal rate of return (IRR), and payback period (PBP). The results shown NPV in 25.33 million US$, IRR in 52.2% and payback period in 21 months, these number indicated the Pongkor project extension is feasible. This study also intended to determine the most affecting variable to the NPV by conducting sensitivity analysis. The results shown the extension project is feasible as long as the gold price not declined more than 18.4% from the base, production cost (COGS) not increased more than 22% and the productivity not decreased more than 16.94% from the base.
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