The President emphasized that downstreaming must be carried out by all private mineral and coal companies and state-owned enterprises (SOEs), so the added value of minerals and coal is present in the country.
By
Kompas Editor
·3 minutes read
KOMPAS/AGNES SWETTA PANDIA
The location of the smelter owned by PT Freeport Indonesia in the Java Integrated Industrial and Ports Estate (JIIPE) industrial area in Manyar, Gresik, East Java on Saturday (8/24/2019) is in the stage of soil compaction.
Indonesia's determination to downstream the mineral and coal industry is symbolized by the inauguration of the construction of the largest copper smelter in the world.
President Joko “Jokowi” Widodo lay the first stone for the construction of the smelter of PT Freeport Indonesia in the Gresik Special Economic Zone (SEZ), East Java, Tuesday (12/10/2021). This smelter will process 1.7 million tons of copper concentrate produced by Freeport Indonesia, which produces 600,000 tons of copper per year.
The President emphasized that downstreaming must be carried out by all private mineral and coal companies and state-owned enterprises (SOEs), so the added value of minerals and coal is present in the country. We support the President's determination to encourage the downstreaming of the mineral and coal industry and other commodities.
Dependence on commodity exports leads to a massive export boost when prices are high. However, commodity prices are always fluctuating. Even though Indonesia is rich in mineral materials, minerals are not renewable. Massive exploitation also has the potential to damage the physical and social environment as we have experienced in a number of former coal mines in Kalimantan. Attention only to mineral and coal exports makes the manufacturing industry sector less attractive, causing a shift of labor to the mining sector. In the long term if focusing only on exports, Indonesia's sustainable economic growth will not be achieved.
LUKAS - BIRO PERS SEKRETARIAT PRESIDEN
Coordinating Minister for the Economy Airlangga Hartarto when delivering a report at the groundbreaking for the construction of the PT Freeport Indonesia smelter in the Special Economic Zone (SEZ) Gresik, East Java, Tuesday (12/10/2021).
The smelter is one link in the series of the downstream mineral and coal industry. Not all minerals have high added value when processed from minerals into concentrates, but copper is one of them. The highest added value from processing minerals into concentrates ranges from 90-95 percent.
Downstreaming must produce the highest added value from processed mineral and coal products, for example, maximizing our mining products that contain rare earths, which have very high economic value.
Downstreaming must be encouraged to birth highly developed product industries. In the case of copper, this metal has the best electrical and thermal conductivity among all commercial metals. With the world's largest copper smelter being built in the Gresik SEZ, the government also needs to prepare for the growing demand for copper in the domestic market. Downstreaming must produce the highest added value from processed mineral and coal products, for example, maximizing our mining products that contain rare earths, which have very high economic value.
We must have a grand industrialization strategy, starting from mineral and coal raw materials, its processing into concentrates, further downstream industries, development of human resources to support the entire process up to the sources of its financing. Downstreaming must greatly boost quality national economic growth.
Kompas/Ichwan Susanto
Rocks containing mining materials are fed into a crusher to become smaller rocks as seen in the production process at the Batu Hijau Project, Newmont Nusa Tenggara in West Sumbawa Regency, West Nusa Tenggara.
We can invite foreign direct investment to get the transfer of knowledge and market network. We can also penetrate global supply chains in pursuit of efficiency. In such a way, the comparative advantage in the form of our mineral and coal wealth can be turned into a competitive advantage and a greater number of quality jobs are created.
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