Five Investors To Build Alumina Smelters Worth US$10 Billion

Jakarta, Dec 18 (ANTARA) - The Industry Ministry said a number of foreign investors plan to build alumina smelters in Indonesia with a total investment of US$10 billion. The plans came after the government issued a regulation banning exports of raw minerals, Director General of Manufacturing Industrial Base Panggah Susanto said. The regulation requires mining companies to process their minerals in the country before being exported. With the regulation mining companies need to build their own factories or have their products processed in the factory of other companies. Currently there are five foreign companies planning to build factories to process bauxite into alumina, each expected to invest around US$2 billion, Panggah said. One of the investors is from Dubai, he said giving no names. Currently they are studying the locations where the factories would be built and seeking cooperation with holders of mining license . Implementation of the projects is expected in 2013, Panggah said. The locations are most likely in Kalimantan, which is known to have large reserves of the basic material bauxite, he added. "We have a program to encourage investors to build and strengthen the national metal and steel industrial structure which is based on mine processing, he said. Based on data the the industry ministry, there are four metal industrial companies which have carried out investment in the downstream sector. They include PT Krakatau Posco, PT Indonesia Chemical Alumina, PT Ferronikel Halmahera Timur, and PT Batulicin Steel. PT Krakatau Posco has invested US$2.8 billion in the first phase of its steel project with a capacity of 3 million tons a year. PT Indonesia Chemical Alumina has built a Chemical Grade Alumina (CGA) plant at a cost of US$450 million with a capacity of 300,000 tons per year. PT Ferronickel Halmahera Timur invested US$1.6 billion in North Maluku building a ferro-nickel plant with a capacity of 27,000 tons per year and PT Batulicin Steel built a steel factory with a capacity of 1 million tons a year in South Kalimantan at a cost of US$500 million .