Lift on ore export ban may affect Indonesia’s growing smelting industry

Indonesia government has operated 32 mineral processing and refining corporations from 2012 to 2016 with the total sum of investment of USD20 billion in smelting industries.

Deputy Chairman of Processing and Smelting Companies Association (AP3I), Jonathan Handoyo commented: “From 2012 to 2017, as many as 32 new smelters were built. The investment value was 20 billion US dollars.”

He further stated that the Investment Coordinating Board (BKPM) has allowed most of the investors Chinese firms’ holders of industrial permits. The 32 smelting companies are involved in processing alumina and functioning in the regions of Indonesia such as Ketapang, Banten, Gresik, Konawe, Morowali and Obi Island.

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In 2014, Indonesia has banned on exporting bauxite and other ore in order to improve domestic processing. On January 12 2017, Indonesia government has lifted ban allowing the export of bauxite and nickel within limitations decided by the government. This newly implemented rules have created concerns among many investors in Indonesia's smelting industry.

Jonatan Handojo, executive director of the Processing and Smelting Companies Association (AP3I) said, "Chinese companies will be most unhappy because they have invested something like $15 billion in developing smelters that are already in operation.” He told this new rules could harm Indonesia's relations with China.