Friday, February 23, 2024

Government grants export relaxation to mining companies until May 2024

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The Indonesian government has provided several mineral mining companies with export relaxation until May 2024, following the ban on export of raw minerals that has been in effect since June 10, 2023. This relaxation is granted on the grounds that these companies have met specific requirements, including progress in building smelters.

Five companies have received export relaxation, such as PT Amman Mineral and PT Freeport Indonesia for copper concentrate. Additionally, PT Sebuku Iron Lateritic Ores focuses on iron ore purification, PT Kapuas Prima Citra for lead, and PT Kobar Lamandau Mineral for zinc production. The export relaxation aims to mitigate the negative impact of the ban on the export of raw minerals under Law Number 3/2020 concerning minerals and coal (Mining Law). It also provides an opportunity for these companies to complete their smelter projects.

The Ministry has issued regulations regarding export relaxation, as stipulated in Minister of Energy and Mineral Resources Regulation Number 7 of 2023 concerning the Continuation of the Development of Metal Mineral Refining Facilities in the Country. This regulation opens up opportunities for five companies to obtain export relaxation for raw minerals. The selection is based on the level of progress of refining facilities, which reached 50 percent by January 2023.

“The opportunity given to holders of metal mineral mining business licenses to sell processed products abroad until May 2024 is limited to copper, iron, lead, zinc, and anode mud resulting from copper refining,” said Arifin Tasrif, Minister of Energy and Mineral Resources.

Freeport’s Smelter Progress

PT Freeport Indonesia (PTFI) reported significant progress in the construction of its second copper smelter in the Java Integrated Industrial and Port Estate (JIIPE) in Manyar, Gresik, East Java, reaching 90.6 percent by the end of 2023. Compared to early 2023, the construction progress increased by 36.1 percent. PTFI aims to complete the smelter construction by May 2024, surpassing the initial target.

Tony Wenas, President Director of PTFI, said that they are striving to achieve 100 percent completion to start the smelter’s operation. Once operational, it requires 6-10 weeks for the engine to be turned on. After ensuring all components are functioning correctly, copper concentrate production is set to begin in August 2024. Full production is expected by December, following a warm-up period.

Amman’s smelter progress

By the end of 2023, the construction of PT Amman Mineral Industri’s smelter had reached 76.1 percent of the planned development, exceeding the initial target of 72.4 percent. The construction progress of the Precious Metal Refinery (PMR) reached 72.7 percent against the planned development of 72.1 percent. The smelter will have a total capacity of 900 thousand tons per year (ktpa) for copper and PMR after commencement.

Sebuku’s smelter progress

According to the Directorate General of Mineral and Coal’s performance report for 2023, PT Sebuku Iron Lateritic Ores (SILO) achieved 90.24 percent progress in constructing its iron smelter, producing sponge ferro alloy, in South Kalimantan by the end of 2023. Compared to early 2023, the smelter’s construction increased by 0.45 percent.

Kapuas Prima Citra and Kobar Lamandau Mineral’s smelter progress

PT Kapuas Prima Citra has completed the construction of its lead and zinc refining facility, reaching 100 percent by May 2022. Meanwhile, PT Kobar Lamandau Mineral’s zinc refining facility achieved 89.65 percent progress by February 2023.

These achievements showcase the commitment of these mining companies to contribute to the development of Indonesia’s mining industry, bringing economic benefits to both local and national levels.

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