5 Metal Mineral Smelters Reach Progress Above 50 Percent

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif reported that currently there are 5 business entities that have made progress in the construction progress of their metal mineral concentrate refining plant (smelter) above 50 percent.

Arifin said, to ensure that the construction of the purification facility can be completed and pay attention to the COVID-19 pandemic, a legal umbrella is needed which is the basis for providing opportunities for the sale of metal mineral processing products for certain commodities and relaxation of concentrat exports, while still being subject to fines for delays.

"Based on the independent verifiers, as many as 5 business entities have progressed in the construction of metal mineral concentrate refining facilities above 50 percent, namely, PT Freeport Indonesia and PT Amman Mineral Industri (copper commodity), PT Sebuku Iron Laterietics Ore (iron commodity), PT Kapuas Prima Citra (leading commodity), and PT Kobar Lamandau Mineral (seng commodity)," Arifin said in a Working Meeting with Commission VII DPR RI quoted on Saturday 27 May.

Meanwhile, for the bauxite commodity, Arifin added, from the plan for 12 purification facilities, 4 smelters have been operational and 8 smelters are in the construction stage. However, based on field observations, there is a significant difference with the results of independent verifiers.

"At 7 smelter locations, it is still in the form of field fields, although in the verification report it is shown that development progress ranges from 32 percent to 66 percent," said Arifin.

Arifin informed, as an effort to consider the continuation of the construction of the purification facility, the Draft Regulation of the Minister of Energy and Mineral Resources concerning the continuation of the construction of purification facilities with substance, including the provision of opportunities for Mining Business Permit holders (IUP)/Special Mining Business Permits (IUPK) Metal Minerals in selling processing results abroad until May 2024 with limited criteria for the commodities of Copper, Iron, Iron, Timbal, and Seng as well as Mud Anoda as a result of copper refining, can only be given to IUP/IUPK holders whose progress on the construction of purification facilities has reached 50 percent in January 2023 and will be repealable if they do not show progress in the construction of purification facilities.

"The implementation of downstreaming must be carried out with measured control and supervision and in accordance with the provisions of the legislation," said Arifin.

Meanwhile, regarding the unfinished construction of several companies, Arifin explained, the Government has issued the Minister of Energy and Mineral Resources Decree No. 89 of 2023 concerning Guidelines for the Imposition of Administrative Fines for the Suspension of the Development of Metal Mineral Purification Facilities in the Country, and the addition of export time is still carried out in accordance with the provisions of the legislation and imposes sanctions on business entities.

The imposition of the fine was in the form of placing a 5 percent Serious Guarantee of total sales for the period 16 October 2019 - 11 January 2022 in a joint account (escrow account).

He explained, if on June 10, 2024, it does not reach 90 percent of the target, then the guarantee of seriousness is deposited on the state treasury, the imposition of administrative fines for development delays of 20 percent of the cumulative value of foreign sales for each delay period taking into account the impact of the Covid-19 pandemic based on the Independent Verifier report, no later than 60 days after the Minister of Energy and Mineral Resources Decree No. 89 of 2023 is valid (May 16, 2023) and IUP/IUPK holders who export in the extension period will be subject to fines further regulated by the Ministry of Finance.