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wo ammonium nitrate plants, which are currently under construction in Bontang, East Kalimantan, are targeted to start operations next year in order to reduce Indonesia’s dependence on importing explosive substances for the mining industry.

One of the two plants is being established according to a joint cooperation between PT Black Bear Resources Indonesia (BBRI) and PT Dahana (Persero).

“The construction of the factory is 70 percent complete and it will begin operating at the beginning of 2012. BBRI has also made a deal with PT Pupuk Kaltim (PKT) on the supply of ammonia,” East Kalimantan Governor Awang Farok told The Jakarta Post in Berau, East Kalimantan, recently.

BBRI is a producer of ammonium nitrate emulsion, while PT Dahana is a company under the authority of the Defense Ministry.

BBRI has invested over US$36 million for the joint operational project, which has targeted its production capacity at 88,000 — 92,000 metric tons (MT) of ammonium nitrate per year.

The other factory belongs to PT Kaltim Nitrat Indonesia (KNI), a joint venture between the Armindo Group and the Orica Group.

The plant is expected to produce 300,000 MT of ammonium nitrate annually.

“KNI’s development is focused on the mining industry and is not [intended] for military purposes,” Awang said.

The establishment of the two factories in Bontang, he said, was partly intended to meet the increasing demand for the commodity in East Kalimantan, which is home to several coal, oil and gas mining companies.

He said the consumption level of ammonium nitrate was 400,000 MT. This is predicted to keep on rising until 2015, when it is expected to reach 510,000 MT. Of this amount, however, only 40,000 MT have been produced domestically.

Ammonium nitrate is currently only produced by PT Multi Nitrotama Kimia (MNK) in Cikampek, West Java, which has been planning to increase its production to 100,000 MT per year from its current level of 40,000 MT.

To cover the nation’s need, ammonium nitrate has so far been imported from China, Australia, India, Korea, Thailand, Japan and the Philippines.

“The factories in Bontang will hopefully help reduce imports of the commodity,” Awang said.

This, he said, was necessary as the mining industry was a priority in East Kalimantan’s provincial administration program to make the province an energy barn for Indonesia.

“We have made every effort to prevent and reduce the dangers posed by mining activities. Among these, is raising awareness about the importance of using operational safety standards when using explosives in mining activities,” he said.