The latest Q2 2025 earnings report from Indonesia’s Merdeka Group presents a striking contrast within its mineral empire. While Merdeka Copper Gold ($MDKA) wrestled with escalating losses, Merdeka Battery Materials ($MBMA) showed signs of recovery, pivoting from a prior quarter’s loss to a profit. Both entities, however, fell short of consensus expectations, reflecting the dynamic and often challenging currents of the global commodity markets.
Merdeka Copper Gold ($MDKA): Navigating Turbulences in Precious and Base Metals
Merdeka Copper Gold ($MDKA) recorded a net loss of $12 million in 2Q25, deepening from a $4 million loss in 1Q25 and sharply contrasting with a $3 million profit in 2Q24. This performance dragged its 1H25 net loss to $16 million, exceeding the $13 million loss in 1H24 and missing analyst projections for a $3 million net profit for the full year 2025.
Gold Operations: High Prices, Dwindling Volume
Despite a significant surge in the average gold selling price, which reached $3,207 per troy ounce (+16% QoQ, +42% YoY), MDKA’s gold sales volume plummeted to 22,739 ounces (-38% QoQ, -9% YoY). This disconnect stemmed from aggressive early sales in 1Q25, where the company offloaded 36,796 ounces against a production of only 25,481 ounces. On the production front, gold volume showed a modest improvement, rising +2% YoY to 50,624 tons in 1H25, aligning with 46–51% of the company’s annual guidance. Cash costs remained stable at $1,125 per troy ounce, comfortably within the $1,100–$1,250 guidance range.
Copper Production: A Strategic Pause at Wetar
Copper sales volume also experienced a sharp decline, falling -41% QoQ to 1,742 tons. This contraction directly correlates with the temporary cessation of mining activities at the Wetar mine, a strategic decision expected to impact operations through 3Q25. Nevertheless, copper production continues through the processing of residual stockpiles, with leaching and recovery anticipated to extend until 1Q27. Overall, 1H25 copper production volume decreased -37% YoY to 4,235 tons, representing 35–42% of the company’s guidance. Cash costs for copper edged higher, climbing +13% YoY to $3.0 per pound, yet staying within the target of $3.0–$3.2 per pound.
Merdeka Battery Materials ($MBMA): Powering Ahead with Nickel Strategy
In a contrasting narrative, Merdeka Battery Materials ($MBMA) posted a net profit of $9 million in 2Q25, reversing a $3 million loss in 1Q25, albeit lower than the $17 million profit in 2Q24. Its 1H25 net profit reached $6 million, a -71% YoY decrease, landing significantly below consensus expectations and merely 23% of the projected 2025 full-year net profit.
Limonite Ore: Optimized Logistics Drive Margins
MBMA demonstrated strong cost discipline in its Nickel Pig Iron (NPI) operations, pushing cash costs down to $9,719 per ton (-3% QoQ, -6% YoY). This achievement positions costs well below the company’s guidance of $11,000 per ton, even as average selling prices remained stable at $11,500 per ton (-1% QoQ, -0% YoY). NPI production volume, however, saw a -23% YoY decrease to 33,045 tons in 1H25. This volume represents 41–47% of the company’s revised lower guidance of 70–80 thousand tons, a downward adjustment from the previous range of 80–87 thousand tons.
Nickel Matte: A Strategic Hiatus Awaiting Market Rebound
Production of nickel matte has been on hold since 1Q25, a decision driven by razor-thin margins. The company indicates that a restart of production is contingent on improved market prices, with the earliest potential resumption slated for 4Q25. This strategic pause underlines Merdeka Copper Gold grapples with operational shifts and declining volumes in its core assets, Merdeka Battery Materials exhibits strong cost management and strategic flexibility, particularly in its limonite and NPI segments. Investors will keenly watch how these divergent trajectories evolve as both companies navigate their respective commodity cycles and execute their long-term growth strategies in a globally competitive landscape.