Association says smelter for zinc, lead not economically feasible

By Bambang Atmaja

The Indonesian Mining Association (IMA) said that building smelters for zinc and lead ores at home would not be economically feasible due to insufficient reserves.

IMA Chairman Martiono Hadianto said that if it is not feasible, then investors would never provide the necessary financing to build the smelters. ?If the reserves are insufficient, then it (the planned smelters) will not be feasible. If it is not feasible who will finance it,? he told Petromindo.com Monday on the sidelines of a mining dialogue session in Jakarta.

The comment is the latest attack from the mining industry over the government?s controversial policy to require the processing and refining of mineral ores at home before exporting them in a bid to generate greater value added from the mining commodities. As mandated under Law No 4/2009 on Coal and Mineral, miners are obliged to build smelters by 2014.

"The investment (for the smelter) must be based on an economic calculation," said Martiono on Monday.

Previously, Thamrin Sihite, Director General for Mineral Resources and Coal told Petromindo.com that insufficient reserves is no reason to abandon the requirement to build smelters as the ores can always be imported to achieve the required economic scale.

Editing by Reiner Simanjuntak