Ministry approves SILO?s request for withdrawal of smelter fund

The Ministry of Energy and Mineral Resources has approved a request by IDX-listed mining firm PT Sebuku Iron Lateritic Ores (SILO) for a withdrawal of part of its smelter commitment fund, Investor Daily reported on Monday.

The paper quoted Director General of Mineral and Coal at the ministry R. Sukhyar as saying that the approval was given after the ministry completed verification of the company?s smelter project. He did not disclose the progress of the project.

SILO made a request on February 12 to withdraw US$1 million of the total $12.3 million smelter commitment fund the company deposited in June of 2014.

The smelter guarantee fund is part of the requirements set by the government to show the seriousness of mining firms to develop required domestic smelter. It is also part of the requirements for the company to be able to resume export of iron concentrates following the introduction of the mineral ore export ban policy in January of last year.

A ministry senior official previously said that a withdrawal of the smelter fund can only be made if progress in the construction of the required smelter has reached 60 percent of the targeted works.

SILO operates iron ore mining and a smelter on Sebuku Island, Kotabaru Regency, South Kalimantan. The company is developing a second iron smelter in Sebuku, able to produce 6 million ton per annum of iron ore concentrates with higher purity level. (*)