Russia Wants to Construct Aluminum Plant in Kalimantan

Russia has communicated its desire to construct an aluminum processing plant in Kalimantan and further its investments in Indonesia.

A delegation of Russian officials and businesses are expected to visit the archipelago on June 11-12 to look into the plant as well as other investment opportunities, according to Rizal Affandi Lukman, the deputy minister for economic and international financing cooperation.

Indonesia, which is set to ban raw mineral exports in January of next year to encourage the construction of refineries and smelters, is welcoming the move, he added.

Rizal said the Russian delegation was also seeking to explore opportunities in other sectors.

Indonesia last year asked all miners to submit plans to build refineries or smelters ahead of the January 2014 ban on raw mineral exports. A 20 percent tax on ore exports was levied as a result.

In April, however, Indonesia softened its policy amid industry criticism and legal challenges to rules whose implementation would have cost Southeast Asia’s largest economy up to $10 billion a year in lost exports.

Deputy Energy and Mineral Resources Minister Susilo Siswo Utomo said the focus is to add value to exports, and for that smelters need not necessarily be built.

“The word process does not mean you have to build a smelter. Sometimes you need to wash, to separate the soil and mud. This is also processing,” Deputy Energy and Mineral Resources Minister Susilo Siswo Utomo said in April. “We also realize that not all minerals can be processed.”

The government hopes construction will have started on at least 10 smelters by the end of the year when a more concrete processing policy will be in place, he added.