Chinese firms expected to invest over $20b in smelters in RI
Thursday, June 20 2013 - 01:27 AM WIB
Industry Minister MS Hidayat said on Wednesday that more than 20 Chinese state firms were expected to construct smelters in eastern part of Indonesia with total investment of more than US$20 billion.
Minister Hidayat said that the firms may construct 15 to 20 smelters in the region?s so called the Indonesia-China economic zone.
"This is a capital intensive project that requires more than US$1 billion per smelter. It is not necessary to build too many smelters. It can be 15 to 20 smelters," he said.
The government will ban the export of mineral products in the form of raw ores starting next year, requiring miners to build smelters at home to process and refine the ores in a bid to generate greater value added for the country.
Some miners have opposed the new policy, arguing that building the required smelters is not economically feasible. Minister Hidayat said that companies such as PT Freeport Indonesia (PTFI), which operates a giant gold and copper mine in Papua, must comply with the requirement by building its own smelting facility or send their ores to domestic smelters for processing and refinery. ?There is no exception (for PTFI),? the minister said.
Minister Hidayat said that the MoU for the development of the zone was being prepared and expected to be signed within the next three months.
Editing by Reiner Simanjuntak