Bauxite producers asserted that smelter construction projects are ongoing and rejected the government’s accusation saying that smelter projects have been neglected because of the recent export ban.
The Association of Indonesian Bauxite and Iron Ore Business (APB3I) said that the construction of smelters continue to progress although the government did not provide extension on export license.
Executive Chairman of APB3I Ronald Sulistyanto stated that businesses are still trying to complete their commitment to develop bauxite smelters despite slowly.
“Smelter construction is not halted, it continues. However, the percentage is small and the progress is slow. It had not achieve major structural level because of the massive cost,” Ronald said on Monday (19/6).
Massive cost
Ronald explained that bauxite smelter construction requires an average spending of US$ 1.2 billion, which equals to IDR 18.6 trillion.
He added that the cost exceeds nickel smelter construction.
Rebutting government statement
Ronald also mentioned the government’s statement, which stated that the smelter construction progress was neglected because some of the locations are still nothing but a plot of land.
Ronald argued that such statement cannot be treated as a reference to claim that the smelter construction has been neglected.
Ronal said that businesses had completed roads and other infrastructures, and that businesses have spent massive cost for land acquisition and land clearing.
“All of those activities require money and if it is not considered as work then what is it?” Ronald argued.
Smelter construction percentage
Back on February 2023, the Ministry of Energy and Mineral Resources release a report on the progress of eight bauxite smelter construction. The report claimed that the progress of the construction does not reflect the actual progress in the field.
The eight smelter are owned by PT Borneo Alumina Indonesia (23.67%), PT Dinamika Sejahtera Mandiri (58.55%), PT Persada Pratama Cemerlang (52.61%), PT Sumber Bumi Marau (50.05%), PT Quality Sukses Sejahtera (57.20%), PT Parenggean Makmur Sejahtera (58.13%), PT Laman Mining (32.39%), and PT Kalbar Bumi Perkasa (37.25%).
Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance Irwandy Arif, stated that a field inspection revealed that the location of the eight smelter is still just a plot of land.
Similarly, Minister of Energy and Mineral Resources Arifin Tasrif said that progress of bauxite smelter construction showed no significant progress.
Nevertheless, Arifin continues to encourage businesses to keep on constructing bauxite smelter although the commodity has been banned from export.
