Ministry of Energy: 36 Mineral Smelters will be BuiltBY NURSEFFI...

Ministry of Energy: 36 Mineral Smelters will be Built
BY NURSEFFI DWI WAHYUNI
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JAKARTA (IFT) – Ministry of Energy and Mineral Resources noted as many as 36 companies have filed permit to develop mineral smelters in Indonesia. Thamrin Sihite, Director General of Mineral and Coal at the Energy Ministry, said construction of the 36 smelters is targeted to be completed before 2014.

Construction of the smelters is conducted in line with the passing of Energy and Mineral Resources Minister Decree Number 7 Year 2012 on Raising Mineral Added Value through Smeltering. "We ensure there will be no more export of mineral raw materials starting 2014. All minerals will be processed domestically,” Thamrin said.

According to Thamrim, investors that build mineral and coal smelters will receive incentives from the government. This is in reference to Government Regulation Number 52 Year 2011 on Value Added Tax Facility to Increase Capital in Certain Businesses or Certain Areas. This regulation is adequate to accommodate demand for incentives from several investors, including tax holiday facility for the construction of smelters outside Java.

Thamrin said companies who cannot afford to develop their own smelter project can form a consortium with mining concession holders. This way, funding and meeting of raw material demand will become easier.

One of the companies that will build a smelter is PT Aneka Tambang Tbk (ANTM). The state-owned mining company has 5 smelter projects valued at US$ 2014. The five smelters are expected to operate in 2014.

The projects include processing of nickel ore to ferronickel and pig iron nickel, bauxite ore to chemical grade alumina (CGA) and smelter grade alumina (SGA), and iron ore to sponge iron.

Aneka Tambang will build a ferronickel smelter in Halmahera (North Maluku) with capacity of 27,000 tons and investment of US$ 1.6 billion. The company will also work in the nickel pig iron project with capacity of 120,000 tons in Mandiodo (Southeast Sulawesi) with investment of US$ 350 million - US$ 400 million. The company will also handle the smelting grade alumina project with capacity of 1 million tons in Mempawah (West Kalimantan) with investment value of US$ 1 billion.

For the CGA project in Tayan, West Kalimantan, Aneka Tambang partnered with Showa Denka from Japan and PT Indonesia Chemical Alumina, with ownership of 80:20. The 300,000 ton capacity manufactory is estimated to require investment of US$ 450 million.

Aneka Tambang is also partnering with PT Krakatau Steel Tbk (KRAS), state-owned steel manufacturer, in the iron ore to sponge iron smelter project in Batu Licin, South Kalimantan. The two state-owned companies will form a joint venture company called PT Meratus Jaya Iron & Steel, with ownership portion of 66 and 34 percent. The sponge iron plan will have capacity of 315,000 tons and investment of US$ 150 million. (*)