MIND ID Expands Smelters, Implements Downstreaming Mandate

Jakarta, 5 April 2023 – MIND ID or Mining Industry Indonesia, the Holding State-Owned Enterprise for the Mining Industry, is in the process of implementing strategic projects to provide added value for the economy through industry downstreaming in various subsidiaries.

MIND ID, since 2017 the Holding for PT Aneka Tambang Tbk (ANTM), PT Bukit Asam Tbk (PTBA), PT Freeport Indonesia, PT Indonesia Asahan Aluminium (INALUM), PT Timah Tbk (TINS), has officially been named PT Mineral Industry Indonesia (Persero) and a separate entity from Inalum.

Heri Yusuf, MIND ID Corporate Secretary, said that, “The presence of MIND ID, which is now a separate legal entity, PT Mineral Industri Indonesia (Persero) as a Strategic Holding Company of the Mining Industry, is expected to raise the synergy and collaboration among Mining State-Owned Enterprise members in Indonesia. Moreover, it is also expected to create a more optimal synergy and efficiency in compiling executing strategies which is not mixed with operational activities,” he said.

Under MIND ID, each of its members is implementing various fast-paced progress of downstreaming projects. For example, in the coal mining sector, PTBA is currently undertaking a downstreaming project, from power generation to renewable energy projects.

For power generation, PTBA is currently implementing the construction at Sumsel 8 region with a capacity of 2x660 Megawatt, with 97.2% construction progress per December 2022. Meanwhile, in the renewable energy sector, PTBA is also implementing solar and wind power generation. Currently, several PTBA solar panels are already operating, among others, at Bandara Soekarno Hatta International Airport (SHIA) and Bali Mandara Toll, of a total 641 kwp.

Several strategic renewable energy projects by PTBA and still in the stage of development, are mostly in the form of synergy with other State-Owned Enterprise in the adoption of solar panels.  Not only solar panels, PTBA is also developing wind power generators with a capacity of up to 2 GW. 

Subsequently, ANTM has implemented a number of downstreaming projects such as ferronickel smelter development in Kolaka, Southeast Sulawesi.  What’s more, ANTM is also building a ferronickel smelter plant in East Halmahera, North Maluku. If both are in operation, the production capacity of ANTM ferronickel can be raised to 40,500 tons per year.

ANTM has also a strategic project in energy transition. At this time, the downstream focus of ANTM is more to the development of electrical vehicle ecosystem, particularly concerning battery development for electric vehicles.

In developing an integrated electric vehicle, the Government through the Ministry of State-Owned Enterprise, has given a task to ANTM, together with MIND ID, PLN and Pertamina, to form PT Industri Baterai Indonesia (IBC). IBC, together with Ningbo Contemporary Brunp Lygend Co. Ltd. (CBL), have signed a framework agreement on nickel ore mining activities to battery recycling industry on 14th April 2022.

In the metal and tin mineral sector, TINS is also conducting downstreaming efforts to development the national tin. One of TINS’ strategic project is the Top Submerged Lance (TSL) Ausmelt Furnace, at an investment cost of USD 80 million, aimed at responding to the challenges raised by the low recovery of the smelting process and insufficient high content tin ore (70% content). With this technology, TINS can now process tin with a lower content, namely up to 40%.

As added information, TINS’ TSL Ausmelt project which welcomed the visit of the Indonesian President Joko Widodo in October 2022, is now operating optimally.

Then there is INALUM, a MIND ID member focusing on aluminium production. Its downstreaming efforts have been conducted by forming Indonesia Aluminium Allow (IAA) subsidiary in the efforts of raising the projection capacity of the Kuala Tanjung smelter, IAA will produce secondary alumium billets with a capacity of 50,000 tons per year, in phases, and in future, will produce various extrusion aluminium products as underlying products.

Meanwhile, Freeport Indonesia is in the process of constructing a mega smelter at the Java Integrated Industrial Estate (JIIPE), Gresik, East Jawa, with a total area of about 100 hectares. The project, called Manyar Smelter, has a capacity of processing copper concentrate of 2 million tons per year and making the single line smelter the biggest copper processing plant in the world.

The Manyar Smelter will be added to the already operating processing smelter, PT Smelting, with a processing capacity of 1 million tons of copper concentrate each year.  Therefore, after the operations of Manyar Smelter, Freeport will be able to process 3 million tons of copper concentrate per year.

Finally, there is the Smelter Grade Alumina Refinery (SGAR) Mempawah, West Kalimantan, project. A project of ANTAM and INALUM through TP Borneo Alumina Indonesia (BAI), processes bauxite into aluminium with a capacity of 1 million tons.

“MIND ID’s commitment in implementing the Downstreaming Program is by adding to the number of smelters to process commodities from raw materials, into half finished material or finished products.  We hope this will be able to raise state income through added value of processing mining goods,” added Heri.

Downstreaming is one of the Government’s focus to advance the economy through the sales added value of raw materials to become half finished or finished projects. The downstreaming efforts of the Ministry of Energy and Mineral Resources (ESDM) are for mineral and coal commodities, among others, nickel, bauxite and tin. The export ban on nickel, for instance, has taken effect since 1 January 2020, as an implementation of the Mineral And Coal Mining Law.

“If we do not take advantage by pushing downstreaming efforts, we will become an importer of finished products. If we see from nickel ore to ferronickel only, the added value is 4 times. Therefore, we can now see the foreign exchange value we can get from the export of finished products, which is several times over compared to the previous time,” explained ESDM Minister Arifin Tasrif, some time ago.

Arifin Tasrif’s statement is in line with the data of the Central Statistics Board (Badan Pusat Statistic – BPS) which shows commodity exports increasing several times over due to the downstreaming efforts. The data shows the export of nickel ore before downstreaming took effect in 2019, ferronickel export was at US$2.59 billion.

After the export ban took effect, the export of ferronickel jumped to US$4.74 billion in 2020, US$7.09 billion in 2021 and penetrated US$13.62 billion in 2022. Meanwhile, the export of nickel derivative products before downstreaming was US$813.16 million in 2019.  Within three years, the export has gone up 7 times to become US$5.98 billion.

McKinsey & Company research, global business management consulting company, said Indonesia is in the number one ranking as the biggest nickel producer in the world, number 2 global tin producer, number 3 global coal producer, number 4 global bauxite producer, number 10 global gold producer and number 12 global copper concentrate producer.

Currently, the above mining companies operating and producing products, are under the management of MIND ID. With all the natural wealth in possession and combined with the commitment of MIND ID to conduct downstreaming efforts, Indonesia’s position in the global supply chain will become even more solid, while at the same time, a motor of future economic growth.

MIND ID is also committed to implement the principles of Good Mining Practice in operating the mines in order to make sustainable mining a reality. MIND ID is implementing the Government’s task and mandate to synergize the processing of mineral resources for civilization, prosperity, and a brighter future.