Jakarta, CNBC Indonesia – The Ministry of Energy and Mineral Resources (ESDM) revealed that throughout 2023 no new smelters or bauxite refining and processing facilities had been completed.
Acting Director General of Mineral and Coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources, Bambang Suswantono, said that until 2023 there were “only” 5 mineral smelters integrated with mining that were already operating, the majority of which were nickel smelters. Apart from that, there are 2 integrated smelters which are still under construction.
However, of the total of 7 smelters mentioned by Bambang, not a single bauxite smelter was built or showed positive progress in 2023.
“The development of the construction of mineral refining facilities until 2023 has reached 5 units, the target has been set at 7 integrated smelter units,” he said at the Press Conference on 2023 Performance Achievements and 2024 Work Program of the Directorate General of Mineral and Coal, Tuesday (16/1/2024).
It should be noted that the number of mining integrated smelters operating until 2023 has remained the same since 2020. The realization of mining integrated smelters operating in 2020-2023 only increased by 1 from 2019, when there were 4 smelters, and 3 smelters in 2018.
The details of the progress of 7 mineral refining developments in Indonesia are based on the records of the Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources, of which 5 are already operating as follows:
– PT Aneka Tambang has had 100% of its locations in Pomalaa, Kolaka, Southeast Sulawesi built and in production since 1976 and 2007 expansion.
– PT Vale Indonesia in South Sulawesi, Contract of Work for matte nickel was built in 1978 and expanded in 2011
– PT Wanatiara Persada 100% in North Maluku completed 2019 Fero Nickel operations
– PT Fajar Bhakti Lintas Nusantara is a 100% nickel pig iron or NPI smelter in North Maluku built since 2015 but has now stopped operating due to high production costs or coke raw materials
– PT Weda Bay Nickel in North Maluku has been 100% operational since 2020
Thus, after 2020 there are no mineral smelters operating to date. There are two smelter projects currently being built, including:
– PT Antam (P3FH project) is 99.9% in North Maluku currently bidding for the construction of a power plant.
– PT Sebuku Iron Lateric Ores or PT SILO 90.24% located in South Kalimantan and is an iron smelter producing ferro alloy sponge.
Apart from that, Bambang also said that of the total of 5 integrated mineral smelters being built, his party said he was monitoring the progress of building other integrated mineral smelters such as the integrated copper smelter belonging to PT Freeport Indonesia (PTFI), and the bauxite smelter in Kalimantan.
He said, especially bauxite smelters, were still having problems in seeking funding from investors.
“Indeed, regarding the 5 smelters, there are several of us also smelters outside of nickel, including Freeport in Gresik for copper, then iron ore for iron literic ore or PT SILO, then bauxite in West Kalimantan is in Ketapang, bauxite in Kotawaringin, Pontianak, Ketapang, West Kalimantan “We are still in the process of searching for investors for funding and restoring IUPs and most of the process is searching for funding investors,” he said.
Previously, the Indonesian Bauxite and Iron Ore Entrepreneurs Association (APB3I) was open about the main obstacles in developing the domestic raw mineral downstream industry, especially bauxite.
Pls. APB3I General Chair Ronald Sulistyanto said that currently bauxite entrepreneurs are still constrained by funding to build domestic bauxite refining and processing facilities (smelters).
“I feel like the (obstacle) is just financial. Because I think the regulations have been resolved by the entrepreneurs. Our entrepreneurs aren't whiny. That means if it can be done, why not? But if we want to do something but don't have the money, it's difficult. ,” said Ronald to CNBC Indonesia when contacted, quoted Friday (29/12/2023).
He said that even building a bauxite smelter in Indonesia requires funds of up to US$ 1.2 billion, equivalent to IDR 18.5 trillion (assuming an exchange rate of IDR 15,443 per US$).
He claims that funding sources from within the country or abroad cannot fund the construction of a smelter in Indonesia. “For foreign (funding) it is clear that we are trying hard to get the sector. But it is just a reflection that domestic banks or Himbara alone do not dare to disburse loan funds to build a bauxite smelter,” he added.
Ronald said that there are only two bauxite smelters in Indonesia, namely those operated by PT Borneo Alumina Indonesia (BAI) and PT Well Harvest Winning (WHW). “Yes, as of today, the movement is not yet significant, right? Because, as I said the other day, they are still not moving towards each other,” he stressed.
[Gambas:Video CNBC]
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