Economic Constraints, Three Smelter Nickel Stop Producing

INDUSTRY.co.id - Palembang - Director General of Minerals and Coal (Ministry of Energy and Mineral Resources), Bambang Gatot Ariyono, said that three smelters had been suspended due to the company's economic reasons.

"The three of them stopped operating due to the company's economic problems, mainly due to the operation of smelting nickel by using Blast Furnace technology that is highly influenced by the price of raw materials, one of which is coking," said Bambang Gatot based on written information received Antara in Palembang on Thursday (10/8 / 2017)

To date, 13 nickel smelters have been built, but three are now halted. The three smelters are PT Indoferro and PT Bintang Timur Steel in Cilegon, and PT Cahaya Modern Metal Industri in Southeast Sulawesi.

Construction of smelters and smelters in the first half of 2017 has reached the target. Of the target 4 smelters to be built in 2017, two smelters have been built until the middle of 2017.

Previously, in the presentation of Minerba sector achievement in the first semester of 2017 at the Ministry of Energy and Mineral Resources, Jakarta, Wednesday (9/8), Director General of Minerba also explained that the actual export of nickel (ore) in the first semester of 2017 reached 403 thousand tons, Amounting to 8.16 million tons.

"The ore exports are given to know and give incentives to serious builders (smelter), because if he does not meet the progress, his (export recommendation) is revoked, who is serious, according to the capacity of the smelter, he can be granted an export license", Bambang said.

He continued, the price of cokes, which has a share of 40 percent of total production costs, increased from an average of 100 US dollars per ton in 2015 to 200-300 US dollars per ton since late 2016. This is the cause of cessation of production activities PT Cahaya Modern Metal Industri.

Meanwhile, the operations of PT Indoferro and PT Bintang Timur Steel since the beginning are not designed to refine the nickel ore so that the economic level will be different from the initial design. PT Indoferro initially refined iron ore while PT Bintang Timur Steel initially refined manganese ore.

PT Indoferro which has an output capacity of 200,000 tons per year ceased production since July 19, 2017. Meanwhile PT Bintang Timur Steel with production capacity of 37,440 tons per year since commissioning in July 2015 has not been operated continuously.

The report also mentions that up to now there are 10 nickel smelters operating with a total production of 1,468,596 tons per year. Meanwhile, 13 other nickel smelters are currently in construction phase with total capacity reaching 1,853,000 tons per year if the 13 smelters are already in production.