Chinese investors seek to invest in RI smelters

Many investors from China have expressed interest to develop smelter projects in Indonesia, according to an Indonesian senior government official.

Bisnis Indonesia quoted Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources Bambang Gatot Ariyono as saying Saturday that the strong interest was seen during a recent presentation made by the ministry in China.

?We promoted smelter investment in China and many were interested,? Bambang said.

He explained that most were interested in developing nickel smelters considering the relatively smaller investment requirement and capacity.

There were also some interests in bauxite smelters, one of which is a plan by IDX-listed mining firm PT Aneka Tambang Tbk (Antam) to develop smelter grade alumina in Mempawah, West Kalimantan.

?Antam has made presentation and will open investment opportunity. We?ll see the realization,? Bambang said.

Meanwhile, Acting Governor of Riau Islands Agung Mulyana said that Nanshan Aluminum plans to develop a US$2 billion bauxite smelter on Bintan Island, which is expected to enter groundbreaking phase in January of 2016.

The government has been pushing investors to develop domestic smelters following the introduction of export ban on mineral ores in early 2014 in a bid to generate greater value added from the country?s mineral commodities.

Progress of domestic smelter projects, however, has been moving at a snail?s pace due to various obstacles such as financing difficulties and lack of electricity.

According to data from the Ministry of Energy and Mineral Resources, of the total 25 smelter projects whose progress has reached over 80 percent, only about half are expected to be completed within the next two years.

In 2016, only seven smelters are expected to enter operation stage, three of which are nickel smelters with combined production capacity of 767,000 tons of ferronickel and nickel pig iron. Another is a bauxite smelter with initial production of 1 million tons per year, and three others are zinc and lead.

This year, six new nickel smelters are slated to start operation with combined capacity of 524,000 tons per year. (*)