Kadin Agrees To The Proposal For A Consortium For Bauxite Smelters

Mine (between)

JAKARTA - Chairman of the Standing Committee of the Indonesian Chamber of Commerce and Industry Arya Rizqi Darsono approved the proposal of the Indonesian Bauxite and Iron Ore Entrepreneurs Association (APB3I) to form a consortium of bauxite smelters.

Arya also suggested that apart from forming a consortium, regional clusters such as the Central Kalimantan Cluster and the Riau Islands Cluster must also be formed.

"Everyone gathered so that a consortium was formed, so they both thought they could reduce the existing burden. Our interest is how these members of the West Kalimantan Chamber of Commerce and Industry can get out of their struggles with this export restriction having a very impact," he said in the Mining Zone quoted Monday, July 15.

According to Arya, this concept needs to be finalized again because it bistrates budget problems that are currently faced by bauxite entrepreneurs who have difficulty building smelters.

Arya said, in addition to government support, bauxite entrepreneurs also need the presence of national banks to fund the construction of smelters.

"When we talk about 1.2 billion dollars, right, equity 20-30 percent is around 300 million dollars. The rest can not be borne by national banks with cheaper interest? Because if we want to take foreign debt, there will be another difference in foreign exchange rates, so it is burdensome for business actors," said Arya.

For this reason, he proposed the formation of a smelter consortium with regional clusters

Then another factor that the government needs to pay attention to is the final product of smelters in the form of alumina whose absorption is still very low.

Moreover, he said, Inalumina's serapanalumina was still limited to 750000 to 1 million tons.

"The rest are we exporting? If we look at our exports to China now, if China experiences an economic slowdown like today we will have a new problem. So I think it is necessary to raise more additional industries such as Inalum-Inalum so that it can absorb the production materials that we produce," he concluded.