A series of conglomerates enter the smelter business, there are Boy Thohir, Haji Isam, Kalla Group

Reporter: Arfyana Citra Rahayu, Dimas Andi | Editor: Azis Husaini

KONTAN.CO.ID -JAKARTA. Business prospects and investment in mineral processing and refining plants or smelters are getting brighter. One indication is that a number of national conglomerates are busy entering the smelter business.

For example, the Adaro Group, owned by tycoons TP Rachmat and Boy Thohir, will build an aluminum smelter in North Kalimantan. Kalla Group through PT Bumi Mineral Sulawesi will also build a nickel smelter in Sulawesi, in collaboration with Posco from South Korea.

There is also the owner of the Jhonlin Group, Andi Syamsuddin Arsyad or Haji Isam. Jhonlin Group will invest US$ 440 million or the equivalent of around Rp 6.3 trillion to build a nickel smelter in South Kalimantan.

There is also PT Cita Mineral Investindo Tbk (CITA), through its associated entity PT Well Harvest Winning Alumina Refinery, the Harita Group company is building Smelter Grade Alumina (SGA) phase II with a capacity of 1 million tons of SGA per year.

Another conglomerate, Arifin Panigoro, is building a copper smelter in Sumbawa through Amman Mineral (see infographic).

President Director of PT Bumi Mineral Sulawesi, Afifuddin Suhaeli Kalla, stated that 24 percent of the world’s nickel reserves are in Indonesia and the majority are in Sulawesi. “We as the sons of the Sulawesi region want to enter into nickel refining because we see that there are already many smelters in Sulawesi, but most of them are foreign,” he told KONTAN, Thursday (23/12).

Meanwhile, PT Adaro Aluminum Indonesia signed a Letter of Intention to Invest to build an aluminum smelter in the Indonesian Green Industrial Estate. The smelter project cost an investment of US$ 728 million.

“We hope that we can help reduce aluminum imports, provide added value to alumina and increase state tax revenues,” said Ario Rachmat, Vice President Director of ADRO, in an official statement, Thursday (23/12).

Meanwhile, Amman Mineral is developing a smelter in Sumbawa with a capacity of 900,000 tons per year which is targeted for completion in 2023. The smelter construction process has reached 27.56% as of July 2021, according to the minimum development target. “We will do our best to complete the project as quickly as possible,” said Rachmat Makkasau, President Director of Amman Mineral, Thursday (23/12).

In order to expedite the implementation of the smelter project, Amman Mineral proposed incentives such as tax holidays, ease of import duties, and related permits.

The Indonesia Mining Association (IMA) sees a number of motives for the entry of tycoons into the smelter business, including making profits. IMA’s Daily Executive Director, Djoko Widajatno, said that Haji Isam’s presence in the smelter industry, for example, was due to seeing promising opportunities.

ADRO entered the smelter related to the development of the bauxite smelter industry in order to meet the needs of the construction and automotive industries.

Chairman of the Association of Indonesian Processing and Refining Companies (AP3I) Prihadi Santoso hopes that not only national conglomerates are interested in investing in the smelter industry, but also regional entrepreneurs.

“Regional entrepreneurs who know the wealth and potential of their respective regions can take advantage of this momentum,” he added.