The lead bullion smelter is one of seven metal smelters expected to begin operations this year.
ublicly listed base metal producer PT Kapuas Prima Coal (ZINC) started on Jan. 8 a production trial of its lead smelter in Central Kalimantan as mining firms work to fall in with the government's commodity downstreaming goals.
The US$15 million smelter is expected to produce 12,000 to 15,000 tons of lead bullion for the first year, generating $43 million in sales. ZINC subsidiary PT Kapuas Prima Citra will operate the smelter.
Kapuas Prima Citra president director Hendra William said in a statement on Tuesday that the company would export the lead bullion to China.
“Moving forward, we hope that we can expand the market, including the domestic market, in line with the ban on raw mineral exports and the government’s target to accelerate mineral downstream [industry development],” said Hendra, who is also a director at ZINC.
Smelter construction is part of the government’s larger scheme to foster downstreaming in extractive industries to grow the economy. To achieve this, regulators have permanently banned exports of nickel ore and plans to enact similar bans on bauxite and raw copper starting June 2023.
The lead smelter is one of seven smelters scheduled to start operations this year. Completion of the seven would bring Indonesia's total smelter fleet to 28 units by the end of this year.
Read also: Indonesia to have seven new smelters this year
The commercial operation trial will be carried out in two stages. In the first stage, the smelter will process lead concentrate into semi-finished lead monoxide. In the second stage, the lead monoxide will undergo a smelting process in the blast furnace, producing lead bullion.
“The second stage will begin in February this year,” said Hendra.
ZINC targeted the full production capacity of the lead smelter to reach 20,000 tons of lead bullion per year, which is expected to add $60 million to $80 million to the company’s consolidated revenue.
Read also: Indonesia to have seven new smelters this year
ZINC is also building a zinc smelter with construction progress at 82 to 85 percent as of this month. The smelter is projected to begin operations in the first quarter of 2023, with a production capacity of 30,000 tons of zinc ingots per year.
“We see that, until now, the prices of lead and zinc are still quite stable. We expect this trend to continue in the following years,” Hendra said.
ZINC booked $42.69 million in sales in the January-September period of 2021, up 61 percent year-on-year from $26.51 million, according to the company's financial statement.
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