Tuesday, April 16, 2024

Delay in RKAB approval leads to halted operations of bauxite mines

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Audina Nur




The Indonesian Association of Bauxite and Iron Ore Entrepreneurs (APB3I) has regretted the delay in the issuance of the 2024-2026 Work Plan and Budget Approval (RKAB) for bauxite mining companies until early this year, citing that it would halt operational activities of dozens of association members.

Acting Chairman of APB3I, Ronald Sulistyanto, said the slow approval from the Ministry of Energy and Mineral Resources (ESDM) has caused dozens of mining companies to cease production amidst the ban on bauxite exports.

He said that domestic alumina factories are already requesting for raw materials from bauxite miners. “Until today, the approval hasn’t been issued as yet. Currently, only around 10 or 12 bauxite miners have submitted their RKAB, which is very few. Without the RKAB, we cannot operate,” Ronald said as quoted by Bisnis.com on Tuesday, February 13, 2024.

He added that this situation had also halted negotiations to attract funding from potential investors for the continued construction of smelters.

Ronald said that some investors, who were considering investing in the 10 smelters currently under construction, are now hesitant to invest due to the halt in upstream mining production earlier this year. According to records from ESDM, there are 80 companies holding bauxite mining business permits (IUP). Out of these 80 registered IUPs, only about 15 to 16 companies of them having submitted RKAB in 2023.

From 2022 to 2023, domestic bauxite input capacity was at 13.88 million tons. The production plan for bauxite RKAB for this year is set at around 14 million tons. “The future bauxite production plan may match the input capacity of the currently operational smelters since there is no relaxation policy for bauxite ore export, which is 14 million tons,” Director of Mineral and Coal Program Development at the Energy and Mineral Rources Ministry, Julian Ambassadur Shiddiq, said.

Apart from the joint venture efforts of Inalum and Antam, seven IUPs are currently establishing smelters, including PT Quality Sukses Sejahtera, PT Dinamika Sejahtera Mandiri, PT Parenggean Makmur Sejahtera, PT Persada Pratama Cemerlang, PT Sumber Bumi Marau, PT Kalbar Bumi Perkasa, and PT Laman Mining. These eight new smelter plans have a bauxite input capacity of 27.41 tons and an alumina production capacity of 9.98 million tons. However, Indonesia currently only has one aluminum plant owned by PT Indonesia Asahan Aluminium or Inalum in Kuala Tanjung,North Sumatra, with an alumina input capacity of around 500,000 tons annually.

Audina Nur






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