Commission VII of the House of Representatives of the Republic of Indonesia (DPR RI) made a second visit to the site of the PT Amman Mineral Industri (AMIN) copper smelter currently under construction near the Batu Hijau mine West Sumbawa. The 4 April 2023 visit was to conduct a first-hand inspection of the site following the report from an independent inspector regarding the progress of construction from August 2022 to January 2023. The report concluded that as of January 2023 the project is 51.63 percent completed.
AMMAN President Director Rachmat Makkasau, who accompanied the delegation, noted that as of April 2023 the installation of piles for the main building has been completed and work on the reinforced concrete foundations has begun. Goods procurement stands at 60 percent, with much of the heavy equipment ready for installation in May.
Progress of the PT Amman Mineral Industri Smelter
The Head of the Commission VII DPR RI delegation, Eddy Soeparno, acknowledged that the progress to date affirmed the company’s commitment to the downstream mining industry. “As a legislative body, Commission VII DPR RI performs a supervisory function. Therefore, by directly observing the progress of the AMIN smelter project, we can obtain accurate data for further discussions with the government regarding the completion time of the smelter construction and the mineral export ban.”
Eddy explained that while a 2020 Ministry of Energy and Mineral Resources regulation banning the export of processed mineral ore remains in effect, the government should consider the delays in construction and goods procurement resulting from the COVID-19 pandemic.
“The decision is in the hands of the government, but we can recommend that the government give special consideration due to the pandemic. So far, we’ve been pretty impressed with how the company has overcome these challenges. We hope that in the next few months, when more equipment and machines arrive, the physical changes will be even more significant,” said Eddy.
Economic Importance and Regional Impact
The 2020 regulation requires mining companies to build a domestic smelter factory by June 2023, at which time a prohibition on the export of mineral ore will take effect. However, in some regions mineral exports are a primary source of revenue. AMMAN, for example, contributes more than 80 percent of the Gross Regional Domestic Product (GRDP) of the district of West Sumbawa, and 17 percent of the GRDP of West Nusa Tenggara. The Batu Hijau mine employs 11,500 for mining operations and related projects. Residents of the Nusa Tenggara region comprise approximately 75 percent of the workforce for AMMAN and business partners.
“We really hope for support from the government regarding the copper-concentrate export policy, as continued revenue from mining operations will be essential to guarantee the fastest-possible completion of the smelter. The constraints resulting from the COVID-19 pandemic and the energy crisis in Europe are force majeure, so the delay in smelter construction is outside of our control. Under the revised schedule, the smelter will be commissioned in July 2024, and operating with 60 percent capacity in December 2024,” concluded Rachmat.
