Indonesia hopes four new smelters will be completed in 2016, a mining ministry official said on Wednesday, as low commodity prices continue to create financial problems for the mining industry and shrink government returns.
Indonesia banned metal ore shipments in early 2014 to encourage firms to build smelters and shift exports from raw materials to higher-value finished metals. But the ban cost the country, the world’s top nickel ore exporter at the time and a major supplier of bauxite, billions of dollars in lost revenue.
Dozens of smelter projects have been delayed, many of them in nickel, as a result of the current downturn in commodity prices, and only five nickel smelters of a targeted 12 were completed last year.
“In 2016 we hope four additional smelters will be operational,” Coal and Minerals Director General Bambang Gatot told reporters. They will process nickel, alumina and lead. The latest figure is around half of an earlier smelter target for this year.
Indonesia’s mineral export rules have been a flashpoint between the government, which is constitutionally bound to maximise returns from resources, and companies including U.S. miner Freeport McMoRan Inc.
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