Smelter Bauxite Mangkrak, Celios Proposes To Give Incentives To Investors

JAKARTA - Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira proposed that the government provide incentives for investors to build smelters.

Thisarts the number of bauxite commodity smelters whose construction is still hampered.

In his report, Bhima said there were 12 bauxite smelters developed, but only four were operating.

"One of the obstacles to the construction of bauxite smelters is the difficulty of seeking funding. Domestic banks have not been interested in funding the bauxite downstream project," said Bhima, Tuesday, January 14.

Bhima said the fate of bauxite downstream requires reform in various aspects. This is because Indonesia is one of the largest bauxite producing countries in the world. However, he continued, the export performance of the bauxite processing industry tends to weaken in 2023.

Based on the latest data, the export volume of the bauxite base metal processing industry in 2023 was only 396.1 tons, down 41.6 percent compared to 2022 (yoy). Then the export value decreased 55.6 percent yoy from 1 million US dollars to 448.4 thousand US dollars.

For this reason, Bhima advises the government to provide fiscal incentives selectively and measurably to investors who build domestic processing and refining facilities (smelters) with a note that they have good energy transition plans and waste treatment.

He also suggested imposing sanctions for companies that do not fulfill the obligation to build a smelter according to the deadline.

"The government must ensure that mining downstream policies are consistent, unchanged, and have a long-term direction," said Bhima.