Tuesday, July 16, 2024

Financial troubles cause delays in Indonesia’s bauxite smelter projects

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A number of bauxite smelter companies are facing financial problems that cause delay in smelter construction projects.

Indonesian Bauxite and Iron Ore Entrepreneurs Association (APB3I) recently acknowledged that there are a number of delays in bauxite smelter constructions.

“The problem is still the same, about finances,” Ronald Sulistyanto, Executive Chairman of APB3I, said as quoted by Katadata.co.id on Monday, June 24, 2024.

However, Ronald was unable to ensure when the bauxite smelter construction would continue with the financial problems still present among the companies.

“Besides that, there still needs sincerity among the investors in constructing the smelter,” he said.

Irwandy Arif, Expert Staff to the Minister of Energy and Mineral Resources (ESDM) for the Acceleration of Mineral and Coal Governance, said ESDM Minister Arifin Tasrif had ordered many stakeholders to directly supervise the bauxite smelter projects on the field.

He said further that ANTAM’s bauxite smelter project is considered promising compared to the other seven bauxite smelter projects, with good progress.

Irwandy also cited that the financial problems facing the companies behind the smelter projects that cause delays in construction.

He added that if the government wants the project to continue onward, the government needs to find investors who are willing to channel funds either from their own or their partners. He, however, did not rule out the possibility of using banks if possible.

Previously, Minister Arifin disclosed that there are investors who lied about the progress of the smelters and that the state of the bauxite smelter facility in Indonesia is far from ready.

This year, Indonesia targets the completion of 16 integrated smelter facilities, with a total investment reaching US$11.6 billion (Rp182 trillion).

The facilities include seven nickel smelters with a total investment of US$2.68 billion; seven bauxite smelters with a total investment of US$5.85 billion; one iron smelter with a total of US$51.5 million; and one copper smelter worth US$3.08 billion.

The smelters are divided into several categories: nickel, bauxite, iron, copper, gold, silver, and tin.

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