JAKARTA (TheInsiderStories) – The Energy and Mineral Resources Ministry has recorded an encouraging progress of nickel smelter development as reflected in the amount of investment in the sector. However, nickel exports were far lower than the quota given by the energy ministry, partly due to lower nickel price, and few were forced to cease operations.
In term of nickel smelter development, Director General for Mineral Resources and Coal Bambang Gatot revealed that as of end October, total investment in nickel smelter has reached US$5.05 billion or Rp68 trillion.
The investments were spent to develop 13 nickel smelter with total volume of 34 million tons of nickel in the period. Based on the energy ministry’s data, the 13 smelters have begun operating and producing 598,000 tons of FeNi and NPI as well as 64,000 tons of Nickel-in-matte (Ni-Matte).
The investment was in line with the government’s drive to boost investment in the downstream mineral sector.
Bambang Gatot said the uptrend of the development of nickel smelter was partly driven by the incentives provided by the government. He said the issuance of the Government Regulation No. 1, 2017 as well as the Energy Ministry’s Regulation Number 6, 2017 have stimulated investment in nickel sector. Based on the regulations, the government granted incentives to mining companies that develop nickel smelters.
According to Bambang Gatot, Indonesia currently have 29 nickel smelters, consisting of smelters that are already producing and smelters that are under construction. The smelters that are already producing, include smelters owned by PT Aneka Tambang, PT Fajar Bumi, PT Cahaya Modern Metal Industry, PT Macika Mineral Industry and PT Integra Mining.
The companies that have invested in building smelters are including, Vale, Aneka Tambang, FBLN, Sulawesi Mining Investment, Gebe Industry Nickel, Megah Surya Pertiwi, COR Industri Indonesia and Heng Tai Yuan. The combined investment of these companies reached US$5 billion.
The Energy and Mineral Resources Ministry has also granted exports quota to six companies with bauxite exports quota of 14.9 million tons. However in the eleven months to November, the total bauxite exports reached 696,000 tons.
Two companies however have stopped the operation of their smelters, namely PT Indoferro, which ceased operation on July 19, 2017, and PT Cahaya Modern Metal Industri, which stopped operation in 2016.
They made the decision due to an increase in cost of production and the decline of commodity price in the first half of the year. Indoferro, established in 2007, operated its nickel smelter in Cilegon, Banten since 2012.
The new smelters have boosted the capacity of domestic nickel smelter to 28 million tons. Of these 13 smelters, 11 are brand new and two are expansion of existing facility.
The total investment of the 13 companies reached US$4.3 billion or Rp56 trillion with combined capacity of 28 million tons of nickel ore.
In addition to nickel smelter, the government has also provided incentives to miners that develop bauxite smelter. At present, there are four bauxite smelters being developed with total investment of US$4 billion or Rp 52 trillion. Indonesia, Bambang Gatot said, has the capacity to produce 13.7 million tons of bauxite.
The Energy and Mineral Resources Ministry has given exports recommendation to 14 mineral producers with nickel exports quota of 22.9 million tons. However, in the 11 months to November, the total nickel ore exports reached only 3 million tons, far lower than the quota.
The 13 nickel smelters that are already in producing stages are as follows:
|No||Company Name||Permit Type||Product||Investment|
|1||PT Vale Indonesia||CoW||Matte||845,000,000||8,000,000||Produced and exported 64,244 tons of Ni Matte|
|2||PT Aneka Tambang (Pomala)||IUP OP||FeNi||600,000,000||2,716,948||Produced and exported 85,539 tons of FeNi|
|3||PT. Fajar Bhakti Lintas Nusantara||IUP OP||NPI||174,000,000||1,065,215||Produced and exported 106,468 tons of NPI|
|4||PT Sulawesi Mining Investment||IUP OPK||FeNi||636,000,000||1,600,000||Produced and exported 194,570 tons FeNi|
|5||PT Gebe Industry Nickel||IUP OPK||NiOH||150,000,000||1,100,000||Producing Ni (OH)2 10,000 tons per month and Nickel (99%) 1,000 tons/month|
|6||PT Megah Surya Pertiwi||IUP OPK||FeNi||320,000,000||2,079,732||Produced and exported 84,537 tons of FeNi|
|7||PT COR Industri Indonesia||IUP OPK||NPI||400,000,000||818,827||Already commisioning, producing and exporting 24,797 tons of NPI|
|8||Heng Tai Yuan||IUI||NPI||36,300,000||250,000||Producing and exporting 3,566 tons NPI in Jan-Jun|
|9||Century Metalindo||IUI||FeNi||50,000,000||641,026||Producing and exporting 11,349 tons of FeNi in Jan-Nov|
|10||Indonesia Guang Ching Nikel and Stainless Steel||IUI||NPI||1,020,000,000||7,500,000||Producing and exporting 30,000 tons of NPI in Jan-Mar, 2017|
|11||Virtu Dragon||IUP OPK||FeNi||500,000,000||4,560,000||Producing and exporting 31,850 tons of FeNi in Aug-Nov, 2017|
|12||PT Surya Saga Utama (Blackspace)||IUP||N/A||300,000,000||3,500,000||Begin producing in November 2017 with 1,028 tons of Luppen FeNi sales|
|13||PT Bintang Timur Steel||IUI||FeNi||2,150,000||292,000||Producing 2,714 tons of FeNI in Aug-Nov 2017.|
In addition to nickel, some companies have invested as much as US$1.5 billion (Rp20 trillion) to process 4.4 million tons of bauxite and 700,000 tons of aluminum. These companies are as follows:
|No||Company Name||Permit Type||Product||Invesment||Input Capacity (Ton)||Project Status|
|1||PT Indonesia Chemical Alumina||IUP OP||CGA||490,000,000||850,000||Producing 31,000 tons of CGA in Jan-Oct.|
|2||PT Well Harvest Winning||IUP OP||SGA||1,100,000,000||3,564,000||Producing 672,744 tons of SGA in Jan. – Oct.|
Written by Roffie Kurniawan, email: email@example.com