Indonesia expects to have 52 smelters operating by 2022 with a total combined investment estimated at US$20.39 billion - Photo by TheInsiderStories.

JAKARTA (TheInsiderStories) – Indonesia expects to have 52 smelters operating by 2022 with a total combined investment estimated at US$20.39 billion, energy and mineral resources (EMR) ministry official said on Monday (01/27). The number is in a downward revision of 68 smelters’ previous projection due to the reduction in the nickel smelter.

“The government is evaluating the progress of the smelter from the previous 68 smelters can operate in 2022 to 52 smelters, many smelters are dependent on nickel ore exports,” EMR minister Arifin Tasrif said in a working meeting with parliament in Jakarta.

The minister revealed, of the 52 smelters, 17 have been built in 2019. Until 2022 there are still 35 smelters consisting of 31 smelters plus two smelters owned by gold and copper miner, PT Freeport Indonesia and two smelters owned by PT Amman Mineral Industri.

“In the evaluation conducted there will be three things that are focused namely around financial close, availability of power supply and all licensing with local governments,” he said.

Meanwhile, the smelter project which was originally dominated by nickel as many as 41 smelters, after the evaluation is projected that only as many as 29 smelters can operate. Thus, the total capacity decreased from 96 million tons to 69 million tons.

Meanwhile, for the 31 smelter project being built, Tasrif explained, 16 projects had not yet reached the financial close stage. Then, nine of them have undertaken a power purchasing agreement with state-owned electricity company PT Perusahaan Listrik Negara (PLN).

“The remaining 22 projects want to build their own means for power supply, but it must be clarified properly or not. We will do a quick win for six months, days ago there was an initial meeting with the smelter company,” Tasrfi said.

Indonesia has 11 of the 29 smelters already in operation, with an annual input capacity of nearly 27 million tonnes. The government also revised down its projection for bauxite smelters to nine, from 11 previously. The government is pushing for domestic ore processing to add value to its exports.

This year, the government expects five smelters will operate, consist of three smelters based on nickel and others use lead and manganese. According to the director at energy and mineral resources ministry, Yunus Saefulhak, nickel smelter owned by PT Antam Tbk (IDX: ANTM) in East Halmahera, North Maluku has an input capacity of 1.21 million tons and a production capacity of 64,650 tons of ferronickel per annum.

Other nickel smelter project managed by PT Arthabumi Sentra Industri in Morowali, Central Sulawesi. Its input capacity reaches 720,000 tons and the production capacity is 72,960 tons of Nickel Pig Iron every year.

Then, PT Kapuas Prima Coal builds a lead smelter in Kotawaringin Barat, Central Kalimantan with input capacity 36,000 tons and the production capacity 22.92 thousand tons bp bullion per year.

In addition, PT Putra Indonesia Jaya’ manganese smelter project in Kupang, East Nusa Tenggara will have input capacity is 103.160 tons and the production capacity is 40.370 tons of Ferromanganese per year. And, PT Elit Kharisma Utama smelter in Cikande, Banten with an input capacity of 1.2 million tons and a total production capacity of two lines of 97.45 thousand tons of Nickel Pig Iron (NPI) tons per year.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com