The Indonesian Bauxite and Iron Ore Entrepreneurs Association (APB3I) revealed that since the enactment of the bauxite ore export ban policy in June 2023, the process of building smelters or bauxite refining and processing facilities in Indonesia has not shown positive development.

Plh. Chairman of APB3I Ronald Sulistyanto revealed that, currently, there are 10 bauxite smelters planned to be built in Indonesia. However, only two smelters have been produced. Those are operated by PT Aneka Tambang Tbk (ANTM) and PT Well Harvest Winning Alumina Refinery (WHW).

"Well, those ten of them have been produced by Antam and WHW. What will increase capacity? If Antam is indeed a new thing. And if I'm not mistaken, it hasn't been produced yet. There are two kinds of Antam. One of them chemically related that is CGA and SGA," Ronald explained to CNBC Indonesia in the Mining Zone program, quoted Tuesday (1/23/2024).

So he said there were still eight smelters whose construction process was hampered or stagnant. Ronald said the reason for the stagnation in the construction of the tower was none other than financial problems.

Ronald said that to build a bauxite smelter, it is necessary to spend up to IDR 1.2 billion, equivalent to IDR 18.8 trillion (assuming an exchange rate of IDR 15,670 per USD). "I have often said that the problem is only financial. Because of what? Because the cost is huge. For 2 million tons (capacity), yes, but not more than approximately USD 1.2 billion. And it's not light," he explained.

He considered that to accommodate the entire bauxite production in Indonesia, it actually only requires as many as six smelters. "And if we make 8-8, Indonesia needs maybe five or six. That's enough. If there are also many problems later, it will become a new problem," he said.

Previously, Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, Irwandy Arif, explained that at least of the 8 smelter projects that are under construction, 7 smelter projects have not shown significant results.

"Not yet, so the name of bauxite ore is still 7; 1 is about to progress, while the 7 has not made significant progress. (It's still like a football field, among others," Irwandy said when meeting at the Ministry of Energy and Mineral Resources Building on Friday, January 19, 2024.

Irwandy assessed that bauxite entrepreneurs would certainly be harmed if they did not immediately complete the construction of their smelter project. Moreover, the government has imposed a ban on the export of bauxite ore abroad. "Yes, you won't be able to sell them later. The production will definitely adjust. They will definitely stop later because it doesn't sell," he said.

Image source: CNBC Indonesia/Muhammad Choirul Anwar.

Source: www.cnbcindonesia.com/Ekspornya Dilarang Sejak Juni 2023, Smelter Bauksit Masih Mandek!