The Association of Indonesian Processing and Refining Companies (AP3I) assessed that there are still a number of challenges affecting the continuity of downstream minerals, particularly nickel and bauxite in Indonesia.
AP3I Chairperson Prihadi Santoso assessed that the Covid-19 pandemic was not the only factor hampering the downstream process of nickel and bauxite.According to him, the focus of investors is currently focused on the certainty of policies and regulations that apply in Indonesia.
The condition in Indonesia itself is still improving towards the principles ofgood governanceorgood governance & practice.This can be seen from the issuance of the Job Creation Law which was followed by the preparation of several RPPs derived from the regulation.
“The RPP shows that there are pebbles across sectors, for example the Ministry of Energy and Mineral Resources with the Ministry of Industry and the Ministry of Environment and Forestry.The role of the Ministry of Environment and Forestry in restructuring the recycling industry can affect the performance of companies in the mineral and coal industry and so on, “he said, Sunday (14/2).
In addition, investors in the downstream nickel and bauxite sectors are also waiting for certainty on the completion of the Indonesian mineral and coal policy document compiled by the Ministry of Energy and Mineral Resources.
Even though it has been processed from 2018 to 2020, the government feels that it still needs a number of inputs from experts and practitioners so that the policy document can be finalized properly.
“How can these investors make the final analysis if the government’s policy is not final yet,” said Prihadi.
According to him, conditions like this also affect the continuity of projects related to downstreaming in the nickel and bauxite sector.For the record, data from the Ministry of Energy and Mineral Resources show that until 2020 there are 13 nickel smelters and 2 bauxite smelters operating in Indonesia.
The government is targeting 30 nickel smelters and 11 bauxite smelters to be established in 2024.The investment value needed to achieve this target is US $ 8 billion for a nickel smelter and US $ 8.64 billion for a bauxite smelter.
AP3I assesses that there are many industrial sectors that can be developed by utilizing products from nickel and bauxite smelters.Apart from meeting domestic demand, products from downstream nickel and bauxite which already have added value can also be exported abroad.
“Research and development is still being carried out to determine the benefits of nickel and bauxite products in Indonesia,” said Prihadi.