State-owned mining holding company, MIND ID, seeks support from the Energy Commission XII of the House of Representatives (DPR) to limit the construction of new smelters in Indonesia over concerns of oversupply of mining products in the global market.

MIND ID President Director, Hendi Prio Santoso, said that oversupply of mining products in the global marketwill ultimately depress commodity prices.

“If there is oversupply, like what has happened in ferronickel, the price will fall. This is detrimental, because oversupply occurs unintentionally and becomes uncontrolled to the point of the sales price is unable to cover production costs,” Hendi told a hearing with the House’s Commission XII on Wednesday, December 4, 2024.

In addition to smelter restrictions, Hendi also requested permission to build a Steam Power Plant (PLTU) specifically for MIND ID’s own consumption. Thismeasure is taken to meet the energy needs of 5 gigawatts to support the construction of the smelter in the future.

“We ask for permission to be given the liberty to provide electricity for our own needs because the construction of the smelter requires a large energy supply, while this need is not covered in the National Electricity Supply Business Plan (RUPTL),” he cited.

Hendi also highlighted the importance of setting production quotas for critical and strategic minerals. He reminded that Indonesia had experienced major losses due to the flood of tin supplies in the global market, which caused tin prices to fall significantly.

“Excessive production without considering global supply-demand is detrimental to the country. We must ensure that the mineral production quota does not exceed world demand so that price stability is maintained,” he said.

Support from Commission XII, according to Hendi, is very much needed considering the role of this institution as a supervisor and mentor of the mining sector. He expressed hope that good collaboration can help maintain the balance of the global market while protecting national interests.