Jakarta – Since the issuance of Law Number 4 Year 2009, the government has given a deadline for mining companies to conduct downstreaming with the obligation to build smelters.
However, a number of mining companies, both holders of Contracts of Work (KK) and Mining Business Permits (IUP), have not yet fulfilled the obligation to build the mineral processing plant.
Chairman of the Indonesian Smelter and Mineral Processing Association, Raden Sukhyar, revealed that the most dominant problem was a stumbling block for smelter entrepreneurs, namely the lack of electricity that the government should provide.
“This electrical energy problem is the most severe. That makes the company forced to build its own generator, so that’s what makes it difficult. We should invest just US $ 1 billion, because we have to build our own power plant out of US $ 2 billion, which is what takes a long time, we have to look for more funds, “explained Sukhyar in a discussion of Tugging the Export of Raw Mineral Policies at Tjikini Lima Restaurant, Jakarta, Sunday (9/25/2016).
However, although there is not much assistance in the availability of electricity, plus inadequate infrastructure, in fact investors can still build a smelter.
“I also appreciate investors who are willing to wake up. Actually there is a share of government in supporting energy and infrastructure. But without it, we already have high progress, “explained Sukhyar.
Data of the Ministry of Energy and Mineral Resources as of September 2016, from a total of 84 Mining Business Permits (IUP) in the center, there are already 64 smelters currently under construction.
With the most smelters coming from 34 nickel smelters, zircon 11 smelters, 7 smelters bauxite, 5 smelters iron, 4 smelters zinc, 4 smelter kaolin, and 2 manganese smelters.
The seriousness of investors who have built this smelter, according to Sukhyar, is evidence of trust in the government. So it should not be undermined by inconsistent rules, such as plans to reopen the export of raw minerals (ore).
Another obstacle to the construction of smelters, said Sukhyar, is that not all companies holding IUPs can build smelters. This condition should be facilitated by the government so that large mining companies that build smelters can absorb ore from these small companies.
“Many small companies don’t have enough capital to build a smelter, but have large seed production. The one who can build a smelter is only the big one, “said Sukhyar.
“Although it is not a requirement, the task of the government can be to collect together IUP-IUP who are unable to build smelters. At present there is an issue that smelters cannot supply seeds, because apparently there is a disagreement in the price issue, “he added.
Meanwhile, Director of Publish What You Pay (PWYP), Maryati Abdullah revealed, the government should consistently impose export bans on both ore and concentrates, so as not to undermine investor confidence that has been committed to mine downstreaming.
On the other hand, downstreaming of mining products can also be enjoyed by the domestic industry with greater foreign exchange earnings and employment.
“For example, in 2011 alone, the price of bauxite was US $ 29 per ton, if processed into alumina it could be sold at US $ 274 per ton or an increase of 10.23 times. Then the alumina is processed again into aluminum, the price becomes US $ 3,822 per ton, or an increase of 139.23 times compared to the selling price in the form of bauxite, “explained Maryati. (drk / drk)
In Media, Media Coverage | PWYP Indonesia | September 25th, 2016