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Indonesia records significant investment in smelter, two cease operations

JAKARTA ( – The Energy and Mineral Resources recorded an uptrend investment in the nickel smelter, in line with the government’s drive to boost investment in the downstream mineral sector. Nevertheless, some smelter operators closed down their operation due to various reasons.

As of end October, total nickel smelter reached US$5.05 billion or Rp68 trillion, Director General for Coal and Mineral at the energy ministry Bambang Gatot Ariyon said.

The companies that have invested in building smelters are including, Vale, Aneka Tambang, FBLN, Sulawesi Mining Investment, Gebe Industry Nickel, Megah Surya Pertiwi, COR Industri Indonesia and Heng Tai Yuan. The combined investment of these companies reached US$5 billion.

Companies that have stopped operation are PT Indoferro, which ceased operation on July 19, 2017, and PT Cahaya Modern Metal Industri, which stopped operation in 2016. The made the decision due to an increase in cost production and decline of commodity price in the first half of the year.

Indoferro, established in 2007, operated its nickel smelter in Cilegon, Banten since 2012. The company was found by businessman Fajar Suhendra, the father of the company’s president director Radius Suhendra. The company produces nickel pig iron.

In July, the company laid off around 1,200 of its workers, as the company could not cover the costs following the fall of nickel prices. The price of nickel declined after the government issued Government Regulation No. 1, 2017 and the Energy Ministerial Decree number 5, 2017 and number 6, 2017.  (*)

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