Govt plans to stop issuing licenses for tin smelters

The Ministry of Energy and Mineral Resources plans to stop issuing the IUP Mining License of Special Production Operation for tin smelters as the existing smelters are considered to have a large idle capacity, CNN Indonesia reported on Tuesday.

Mochtar Husein, Inspector General at the ministry, the ministry plans to introduce the new policy as audits conducted by the ministry in Bangka Belitung and Riau Archipelago provinces indicate that the utilization of capacities at the existing smelters there have sharply declined.

The audits indicate that last year, the utilization rate of smelters in both provinces reached 20.73 percent of the total installed smelting capacity of 340,630 tons per year. It was lower than the utilization rate of 21.74 percent in 2014.

Besides, the audits indicate that in 2015, the utilization rate of refining facilities stood at a mere 20.82 percent of the total installed refining capacity of 339,186 tons per year.

?We should talk first among ourselves before taking the next steps. If the utilization rate of the existing smelters is only 21 percent, do we need to build new smelters,? Mochtar asked.

He noted however the audit was made based on limited data. The problem was that the ministry did not involve the Ministry of Industry, which has data on smelter license holders, in making the audit.

?Since the Ministry of Industry was not involved, we carried out the audit without having a (complete) data on issued smelter licenses. The regional governments (the Bangka-Belitung and Riau Archipelago provincial administrations) were not involved either. We only had a limited access to the smelting industry,? he said without providing details.

Mochtar said the audit was conducted on 47 smelter owners. OF the total, 29 smelters or 61.7 percent are still active, while the remaining 18 have stopped operation. The figures and audit result could change if the Ministry of Industry has provided its complete data, he said.(*)