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JAKARTA (TheInsiderStories) – Three smelting companies halt their operating following the dropped of nickel price since the beginning year. The firms namely PT Indoferro, PT Bintang Timur Steel located in Cilegon, West Java and PT Cahaya Modern Metal Industri in Southeast Sulawesi.

The nickel price decline occurred when the government issued Government Regulation No. 1/2017 that nickel ore export relaxation. The nickel price on the London Metal Exchange (LME) exchange on July, 7 fell to as low as US$ 8,940 per ton while four days earlier, the price in the range of US$9,400 per ton. Meanwhile, the price of coke, nickel raw materials, soared.

Director General of Mineral and Coal of Ministry of Energy and Mineral Resource (MEMR) Bambang Gatot Ariyono denied the halt of the three firms operations caused of the nickel ore export relaxation policy.

According to him, that is caused by the economic problems of the company. The nickel ore export relaxation policy become an incentive for investors to build a smelter seriously.

“The ore export is given in order to know and give incentives to build (smelter), because if he does not meet the progress, (the export recommendation) is revoked,” said Bambang.

He also said that the ore nickel export realization is relatively small. The nickel ore exports realization in the first half of 2017 reached only 403,000 tons or 5 percent of the export quota of 8.16 million tons or 8 percent of world nickel production.

In the case of PT Cahaya Modern Metal Industri, the halt of company operations is due to the operation of nickel smelting using blast furnace technology, which is strongly influenced by coke. The coke price which has a share of 40 percent of total production costs from $100 per ton in 2015 to $200-300 per ton since the end of 2016.

Meanwhile, Indoferro and Bintang Timur Steel were not originally designed to refine nickel ore so that its economy will be different from the original design of nickel ore. Indoferro initially refined iron ore while Bintang Timur Steel initially refined manganese ore.

Indoferro which has the capacity of 200,000 tons per year ceased production since July 19, 2017, while Bintang Timur Steel with the capacity of 37,440 tons per year since commissioning in July 2015 has not been operated continuously.

10 nickel smelters still operate with a total capacity of 1,468,596 tons per year while 13 other nickel smelters are still under construction with a total capacity plan of 1,853,000 per year.

This year, the MEMR is targeting four smelter developments. In the first half of 2017, two smelters have been completed and will be commissioned in September 2017. Both are PT COR Industries in Morowali and Bintang Smelter Indonesia in Konawe with a total capacity of 1.34 million tons.

Meanwhile, two other smelters expected to be completed this year are iron ore smelter PT Sumber Baja Prima with the capacity of 65.847 tons per year in Sukabumi and zinc smelter by PT Kobar Lamandau Industri in Central Kalimantan with the capacity of 60,000 tons per year.

PT Blackspace, a Russian mining company, said that the company was not disturbed by the government’s mineral relaxation policy. Business Director Blackspace Yosef Paskananda said the company’s plan to build 10 smelters is still continued because they have nickel mines in Kabaena and Morowali, Southeast Sulawesi with reserves of 50 million tons each.

“We also have 2 smelters now being commissioning,” said Joseph.

Local based miner PT Macika Mineral Industri Director, Ramli Halim also said, his company operates as usual. Firms that lose stop operating, he said, is a company that only focus on the smelter industry and does not have a nickel mine. (RF)

List of smelter companies already operating in Indonesia:

NICKEL

– Banten (PT Indoferro, PT Century Mentalindo, PT Bintang Timur Steel)

– East Java (PT Gebe Industry Nikel),

– Central Sulawesi (PT Vale Indonesia (KK), PT Sulawesi Mining Investment, PT Indonesia Guang Ching Nickel and Stainless Steel)

– South Sulawesi (PT Titan Mineral),

– Southeast Sulawesi (PT Antam Pomala, PT Cahaya Modern Metal Industries, PT Macika Mineral Industries)

– South Sulawesi (PT Titan Mineral)

– Southeast Sulawesi (PT Antam Pomala, PT Cahaya Modern Metal Industries, PT Macika Mineral Industries)

– North Maluku (PT Fajar Bhakti Lintas Nusantara, PT Megah Surya Pertiwi)

OTHER COMMODITIES

– West Java (PT Indotama Ferro Alloy *Manganese*- East Java (PT Smelting *Copper* – West Kalimantan (PT Indonesia Chemical Alumina *CGA*, PT Well Harvest Wining Alumina Refinery *SGA*)

– East Java (PT Smelting *Copper*)

– West Kalimantan (PT Indonesia Chemical Alumina *CGA*, PT Well Harvest Wining Alumina Refinery *SGA*)

– South Kalimantan (PT Delta Prima Steel *Iron Ore*, PT Meratus Jaya Iron & Steel *Iron Ore*)

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