Lumbung hopes galena smelter to start operation this year

By Thomas Sembiring

Mining company PT Lumbung Mineral Sentosa hopes to be able to complete construction and start operation of its galena smelter in Bogor, West Java, this year.

Company Director Ricky Gowdjali said on Monday that construction progress has reached almost 60 percent. ?The target is (for the smelter) to start operation this year,? he said.

Lumbung started construction of the US$10 million galena smelter in May of last year. The smelter will produce galena ingot from lead and zinc concentrates.

While, acknowledging there has been no serious obstacles in developing the smelter project, Ricky said that the current drop in commodity prices has affected the company?s financial condition. ?Production cost is now higher than selling (price),? he said.

Lumbung, which exports parts of its concentrates to South Korea and China, has seen some off takers cancelling their purchases, while in other cases the company has been forced to revise contracts as it could no longer sell products based on initial terms.

Editing by Reiner Simanjuntak