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Investment shortfalls cause 30% drop in nickel smelter construction by 2022
The government estimates that only 29 nickel and 9 bauxite processing facilities will be operational by 2022, instead of the 41 nickel and 11 bauxite smelters initially planned.
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Nickel ore is processed at a PT Vale Indonesia smelting plant. Planned nickel and bauxite smelters will not be finished on schedule because of investment shortfalls. (JP/Ruslan Sangadji)
L
ess than a month before Indonesia bans the export of raw nickel ore, the Energy and Mineral Resources (ESDM) Ministry has lowered its projections for nickel and bauxite smelter construction by 2022 because of investment shortfalls.
A ministry official said on Dec. 6 that domestic smelters could still absorb domestic metal production, particularly nickel, in 2022, despite lowered smelter input capacity.
“With a combined input capacity of 69 million tons [yearly], our smelters are sufficient for 30 years. That’s already great,” said the ministry’s mineral business development director Yunus Saefulhak.
The Energy Ministry initially expected 41 nickel smelters and 11 bauxite smelters to begin operation by 2022, but due to investment shortfalls, the ministry estimates that only 29 nickel and 9 bauxite facilities will be operational by then. It means that about 30 percent of the smelters currently under construction could not be operated according to initial schedules.
The smelters will process raw nickel and bauxite ore to create refined metals for use in higher-value products such as car batteries, stainless steel and aluminum.
The smelter shortfall has lowered the projected nickel input capacity for 2022 by 28 percent to 69.7 million tons per year. The projected bauxite capacity has fallen 11 percent to 29.6 million tons per year.
"The remaining smelters are still under construction. We evaluated them, and their progress is slow. If they finish, we'll consider it a bonus. Some of them are less than 10 percent complete," said Yunus.
