Power surplus lures smelter investors to East Java

Several foreign investors have expressed their interest in pouring investment into East Java province, driven by an abundant power supply in the region which, this year, will have a surplus of more than 4,000 megawatts (MW), the highest level nationwide, The Jakarta Post reported on Monday.

Among the foreign investors was a Chinese firm that planned to set up a nickel smelter in Brondong district, Lamongan regency, deputy manager of state electricity firm PLN?s East Java distribution unit, Arkad Matulu, said. The smelter, slated for construction in June next year, would require electricity totaling 300 MW for its operation, he added.

?The smelter will need around 300 MW and in Lamongan, the firm proposes 100 MW for its initial phase,? Arkad said in Surabaya on Monday.

Apart from the Chinese investment, the electricity firm also accepted requests for power infrastructure establishments and electricity supply guarantees from five other foreign investors that would build smelters in the province, he said.

At present, PLN in East Java provides power supply up to 8,670 MW in electricity. As the power consumption reaches only 4,245 MW during peak hours, there is a surplus of 4,425 MW, according to PLN statistics.

Beginning January, 2014, the government will no longer allow exports of unprocessed mineral ores. Mining companies should therefore set up their own smelters or cooperate with other smelting operators to process their raw mineral production.(*)