Thursday, 23 January 2014


As implementation of the Minerba Law No.4 2009, one mineral producer processed bauxite into aluminum and alumina starting April or May this year, and planned to lay first foundation stone for building harbor, powerhouses, and smelter to process bauxite in Sumatra. Minister of Industry M.S. Hidayat disclosed that a subsidiary company of Nansha Group based in Shandong, China planned to build their integrated factory in Indonesia; presently still at the stage of land clearing.

Minister Hidayat in reporting his visit outcome to China disclosed that the Chinese company who joined company with exporter of bauxite and nickel from Indonesia planned to build a powerhouse at the capacity of 2 X 150 MW and bauxite smelter at the capacity of 600.000 to 1 million tons per year to be processed into Alumina. The total investment was estimated at USD 5 billion.

“Today in collaboration with a mining permit [IUP] holder in Indonesia, the company was trying to clear land in Sumatra. That was the reason they asked for tax exemption facilities and accordingly I will grant tax allowance for them, as long as they build infra structure facilities in Indonesia. I am shocked myself because there I saw that they had been pilling up million tins of bauxite and nickel from Indonesia and Australia. They claimed that the raw material would be processed aluminum and alumina would be re exported to Japan and Korea, “Minister Hidayat disclosed.

It was expected that all facilities including smelters to be built, would be ready in2 years. They fully understood Indonesia’s law, so they invited us to a meeting while carrying out their investment activities in Indonesia. According to the Law as per January 12 next, there will be no more export of mineral ore from Indonesia” Hidayat stressed

He further remarked that the Government remained consistent about the command in the Minerba Law where raw materials must be processed to produce added value. Smelters were designed to create added value because the mining yields must be purified but there were also mining materials still in the from of concentrate.

However, what was exactly the percentage was still being formulated. “If there is anyone who mentioned a definitive figure it must be a lie because the data is supposed to be reported to the President before January 12. Soon the Government Regulation would be specification or breakdown of Law. There will be detailed Ministrial Regulation to be released before January 12” Minister Hidayat stated.

Businesspeople Still Questioning about Their Faith

The Association of Indonesian Gold Miners [ATEI] questioned their workers’ faith amids export restriction related to downstreaming program. Today some people believed miners’ faith was determined by experts and politicians.

Chairman of ATEI Natsir Mansyur believed that some aspects to be considered was multiplier effect of economy felt by the people national and regional level where mining business sector served as propeller of development in the regions. “Miners are supportive to the down streaming program in mineral mining, but it would take 4 years to build smelters” Natsir remarked.

Furthermore Natsir stated that the decision made stipulating minimum copper content of 15% and gold 99% was not Government’s decision and businesspeople’s interest having Working Contract, Mining Permit [IUP] and special IUP for processing from the Government.

The stipulation was transparent because the stipulation of minimum content involved many parties starting from the Ministry of Energy and Human Resources, KADIN Down streaming Team, ATEI, KK businessplayers, IUP, and special IUP for Processing and Purification. “This is definitely a joint communique. We also want this business but without deviating from the existing rules. That there was adjustments in the implementation of Law No. 4 Minerba was reasonable, pro and contra is something natural” Natsir said. (SS)  

Business News - January 15, 2014

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