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19 smelting plants in Indonesia expected to begin operation by 2017
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Friday, 24 Feb 2012
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The Energy and Mineral Resources Ministry has reported that at least 19 metal processing and refining facilities are currently either under construction or subject to feasibility study as part the country's efforts to comply with a law banning ore exports beginning 2014.

Of the 19 facilities, seven are now in the construction phase, six under examination for feasibility and the remaining six have just obtained construction permits. Those facilities will begin commercial operations between 2012 and 2017.

Mr Thamrin Sihite minerals and coal director general said that "This year, an iron smelter producing sponge iron with a total production capacity of 500,000 tonnes per year will begin operations. The smelter is being built by Indoferro."

The construction of the processing and refining facilities is part of the mining industry’s efforts to meet the requirement of the 2009 Law on Minerals and Coal, which has ordered a stop to ore exports in two years' time.

The requirement is contained in the 2012 ministerial regulation on added value for mineral commodities through processing and refining, which was issued recently as part of the implementation of the law. The regulation sets minimum limits of mineral content in processed products for export. For instance, for copper, gold and silver, the limit is 99%.

Mr Thamrin explained that "This policy aims to conserve our natural resources as well as improve their economic benefits. If the ores are refined, their value will increase. The presence of smelters will also provide job opportunities for locals."

According to the ministry's data, state miner PT Aneka Tambang plans to build four smelters in Halmahera, North Maluku (ferronickel); Mandiodo, Southeast Sulawesi (nickel pig iron); Mempawah, West Kalimantan (smelting grade alumina) and Gresik, East Java (gold, silver and copper).

However, the Gresik project has been suspended due to the results of a study that says the project is not economical.

State steel maker PT Krakatau steel and Korea based POSCO have also teamed up to build a production plant in Cilegon, Banten, with a total production of 3.5 million tonnes of steel plate, 2.5 million tonnes of steel slab and 3 million tonnes of hot rolled coil steel per year.

Nickel producer PT Vale Indonesia is now conducting a feasibility study for building a smelter in Pomalaa, Southeast Sulawesi, with a production capacity of 48,800 tonnes per year. The smelter is projected to begin operations in 2017.

Regarding coal in Prabumulih, South Sumatra, Pendopo Coal Gasification and Pendopo Coal Upgrading are also conducting feasibility studies for coal gasification and coal upgrading facilities. The coal gasification is expected to start in 2016 and the coal upgrading in 2013.

As reported earlier, the government has given three months for all mineral mining companies in the country to submit comprehensive proposals on their strategies to comply with the ore export ban in 2014.

The proposals must include how they will process and refine their raw commodities, whether they will build their own smelters, cooperate with other companies to build smelters or refine their ore in external smelting plants.

CompanyLocationProductProduction Capacity
PI Anoka TambangHalmahera, North MalukuFerronickel77,000 tons of FeNi/year
PT Anoka TambangMandiodo, North Konawe, Southeast SulawesiNickel Pig iron170,000 tons/year
PI Aneka TambangMempawah, West KalimantanSmelting Grade Alumina1 million tons of SGA/year
PT Indonesia Chemical AluminaTayan, West KalimantanChemical Grade Alumina300,000 tons of SGA/year
PT Vale IndonesiaPomalaa, Southeast SulawesiNickel Hidrocode48,800 tons/year
PT Weda Bay NickelWeda, North MalukuNickel Hidrocode60,000 tons/year
Meratus Jaya Iron & SteelBatu Lecin, South Kalimantan Glegon, BantenSponge Iron315,000 tons/year
IndoferroSponge Iron500,000 tons/year
PT Sebuku iron LateriticSebuku, South KalimantanSponge Iron1 million tons/year
PT Krakatau Steel POSCOCilegon, BantenSteel3.5 million tons of plates/year, 2.5 million tons of slab/year, 3 million tons of HRC/year
PT Nusantara SmeltingBontang, East KalimantanCopper Cathode200.000 tons/year
PT Aneka TambangGresik East JavaGold, Silver etc2,000 tons/year
PT IndosmeltMaros, South SulawesiCopper Cathode100,000 tons of copper cathode, 200,000 tons of copper stag
Pendopo coal GasificationPrabumulih, South SumatraCoal Gasification
Pendopo Coal Up GradingPrabumulih, South SumatraUpgraded Coal5 million tons/year
PT Dairi Prima MineralDairi, North SumatraLead and Zinc concentrate110,000 tons of lead/year and 220,000 tons of zinc/year
PT Agincourt ResourcesSouth Tapanuli. North SumatraDore Bullion250,000 tons of gold/year and 2.5 million tons of silver/year
PT Jinghuang IndonesiaMorowali, Southeast SulawesiSponge ferronickel2 million tons/year
PT TimahOlegon, BantenTin Chemical500,000 tons/year


Source - Energy and Mineral Resources Ministry

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