Explosive maker and distribution firm PT Multi Nitrotama Kimia (MNK) increases the capacity of its ammonium nitrate production from only around 37,000 tons to 137,000 tons a year by starting the commercial operation of its second ammonium nitrate plant inKrawang, West Java, in mid-January this year.
MNK, established in 1987, has obtained the permit to produce and distribute explosives since 1991. The ammonium nitrate, as one and the main raw material for explosives, has been produced since 1990 in the MNK first plant, which has the capacity to produce only around 37,000 tons of chemicals per year.
Though the plant produces only 37,000 tons ammonium nitrate per year, MNK has, however, managed to distribute up to 200,000 tons per year. MNK has imported the rest of the chemicals to be distributed locally, especially to the coal industry, Dharma Djojonegoro, the President & CEO of PT MNK, told Coal Asia in early February 2012 in Jakarta.
This year, MNK is optimistic they would be able to produce an additional 90,000 tons of ammonium nitrate in their second plant, so the total production of both plants would reach 127,000 tons, Dharma said. “The second plant is actually capable of producing up to 100,000 tons per year,” Dharma said. For the total distribution of ammonium nitrate this year, MNK has set the target to manage up to 235,000 tons, which is an increase compare to that of last year, which was 180,000 tons. ”We keep on trying to reduce the import volume of the ammonium nitrate,” Alex Djajadisastra, the Commercial Director of PT MNK said.
According to Alex, the local market of explosives is still wide open. Moreover, the mining industry, especially coal mining, has continued to develop. Alex estimated around 570,000 to 580,000 tons of ammonium nitrate would be needed throughout the year to anticipate the growth of the industry. ”Within the next five years, this industry will continue to grow… as there is the factor in which the coal industry also continue to develop and grow…. The average growth would be around eight to 10 percent per year,” said Rolaw P. Samosir, MNK’s director of Finance and Administration, who accompanied Alex during the talk with Coal Asia.
At present, around 70 percent of the explosive products have been used to facilitate the coal mining industry. Alex said that around 20 percent has been utilized in other mineral mining, while the remaining 10 percent is locally distributed to facilitate various industries such as; construction, and cement.
MNK currently holds around 45 percent market share of the explosive industry. There are at least seven more similar companies competing in the same market which is still wide open, Alex said. Some of MNK’s major clients, Alex said, include PT Freeport Indonesia, PT Pama Persada, PT Newmont Nusa Tenggara (NNT), PT Adaro Indonesia, PT Kideco Jaya Agung, and PT Asmin Koalindo Tuhup.
MNK is the only company, which runs an integrated business on explosives, starting from trading, production, as well as service provisions. ”Maybe we offer the same product as everyone else does, but we offer more to our clients,” Alex said.
”We offer full, all-in services; we prepare the plant, we install the explosives on the designated place, put them into the set holes, and detonate the explosives. MNK offer reliability and prime customer services to our clients,” Alex said.
Besides that, Rolaw added that MNK deserved the excellence because it could ensure sustainable production of ammonium nitrate, as its raw materials are, among others, ammonia (NH3) and nitric acid (HNO3) which can be easily obtained from the fertilizer maker PT Pupuk Kujang, which is located near MNK’s ammonium nitrate plant. Besides that, PT Pupuk Kujang is actually one of MNK shareholders which hold approximately 25 percent ownership of PT MNK.
“We secure the raw material supply,” Rolaw said. At present, the majority of MNK shareholders are Indonesia-listed firms; PT Ancora Indonesia Resources Tbk with 50 percent ownership shares, Yayasan Dana Abadi Karya Bakti (Dakab) with 25 percent ownership, and the fertilizer maker, PT Pupuk Kujang. MNK has also actively engaged in trading activities of goods related to ammonium nitrate products, also blasting services, which include accessories and other supporting equipments. The company has worked together with several reliable suppliers in the field. Ammonium Nitrate Fuel Oil (ANFO) is one of many types of materials for explosives with the largest part of its components, consists of ammonium nitrate mixed with fuel oil. Based on developed research, experts in mining industry prefer the use of ANFO due to its safety and economical characteristics. Compared to other types of raw materials for explosives, ANFO is in the category of dry-based explosives with high safety for either in-soil blasting or open detonations with the hole-diameter between one and 12 inches, or more.
MNK sells various types of accessories for explosives for mining activities, such as dynamites, detonators, and nitric acid.
Nitric acid is one of the ingredients to manufacture ammonium nitrate, emulsion, also bulk explosives.
For types of services, MNK provides, among others, total loading and blasting services, also down-thehole services which is an integrated services for mining works. They include producing the explosives manually, as well as in mobile setting, installing the explosives in the priming holes (installing detonators and dynamites), and loading bulk explosives.
Besides that, MNK also offers consultation services for detonation techniques and mobile mixing units so that the installation process (filling explosives into the drilled holes) can be more practical and done faster.