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Jakarta Post

Indonesia to have four new smelters this year as mineral ore export ban nears

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Fri, January 24, 2020   /   12:40 pm
Indonesia to have four new smelters this year as mineral ore export ban nears Nickel ore processing carried out at a factory owned by PT Vale Indonesia. (JP/Ruslan Sangadji)

The government expects four smelters with a combined annual input capacity of 2.07 million tons and output capacity of 200,923 tons to begin operations this year.

An Energy and Mineral Resources Ministry official told reporters on Thursday that the smelters would produce ferronickel, nickel pig iron, lead bullion and ferromanganese. Their annual production outputs are 64,655 tons, 72,965 tons, 22,924 tons and 40,379 tons, respectively.

“The government guards these projects. The point is to get them done,” said the ministry’s mineral business development director Yunus Saefulhak in Jakarta.

Among the upcoming smelters, the largest one by output is publicly listed diversified miner PT Aneka Tambang’s (Antam) nickel smelter in East Halmahera, North Maluku. The smelter, last valued at US$1.6 billion, will produce 64,655 tons of ferronickel each year.

Read also: Indonesia tightens grip on nickel and coal exports

The four projects add to a list of 29 smelters expected to be operational by 2022, which is when Indonesia will ban all mineral ore exports and, thus, needs a sizeable downstream mining industry to absorb excess domestic supply. The country is particularly expediting nickel smelter development because it is the only metal whose export ban starts this year.

Yunus said some nickel miners were “relayering ore on bedrock” to reserve supply while waiting for local smelters to become operational.

He added that there was a fifth smelter expected to come online in June, namely PT Elit Kharisma Utama’s (EKU) nickel smelter in Banten. However,  EKU’s smelter, which can produce 97,458 tons of nickel pig iron each year, will only begin operating at half capacity this year.