Jokowi urged to be firm on requirement to build smelters

Jokowi urged to be firm on requirement to build smelters

ilustration - A Truck in smelter site in Bintan Kepulauan Riau (ANTARA FOTO/Henky Mohari)

Jakarta (ANTARA News) - The Indonesian Association of Young Businessmen (Hipmi) asks the new government to be firm in the implementation of the regulation requiring mining companies to process their mineral ores in the country .

A law effective as from January 2014 bans exports of unprocessed minerals forcing producers to build smelters to process their minerals.

The policy is to open more jobs in the country and to increased added value of the export commodities.

"After the Law came into force in early 2014, realization is low in the construction of smelters," a chairman of HIMPI Bahlil Lahadalia, said in a statement here on Tuesday.

HIPMI, therefore, asks the government to reaffirm application of the law and remind the mining investors of their obligation.

Bahlil said based on official data, new investment in smelters reached only US$5 billion or 28.57 percent of the original plans.

Data from the energy and mineral resource (ESDM) ministry, the government has issued 178 mining license (IUP) by June 2014, but by the end of 2014, feasibility studies have beebn made only for 102 licensed projects.

Groundbreaking has taken place only for 12 projects with 25 smelters starting production.

Therefore, HIPMI urged the government to be firmer on investors to force them to build their smelters, he said.

Firmer measure is necessary to accelerate the process of development in the downstream sector to make up for the slowdown in the manufacturing sector and to cope with current account deficit, he said.

"The deficit widened following the ban on exports of mineral ores, but we could make up for the deficit if we start massive development of smelters immediately," he said.

At the same time, he said, the government should start building infrastructure supporting the smelters such as roads, ports, power plants , gas supply facility and telecommunications system.

(AS/A014)
(T.SYS/B/H-ASG/A014)

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