JAKARTA (Yosefardi) – The government of Indonesia is urged to provide optimum support for local investors on smelter development projects, following the export ban for ore minerals.
Adhityo Rizaldi, member of Commission VII of the Lower House of Representatives (DPR) and lawmaker of Golkar party, said the government needs to also provide tax allowance for smelter, as did for other commodities.
He also demanded the government to accelerate the infrastructure development for supporting the smelter projects in the country.
The Indonesian gold and copper association (ATEI) earlier noted that the miners would need minimum 4 years for building the smelter.
Martiono Hadianto, chairman of the Indonesian Mining Association (IMA), also chief of Newmont Nusa Tenggara, suggested the government of Indonesia to better appeal or discuss with the mining contractors (KK) to invest on smelter, instead of making a pressure through the Law.
He noted that the rate of return of investment on smelter is less than 12% with payback period taking more than 8 years. As a consequence, this project could not be financed by commercial banks.
The smelter project would be only funded by other sources such as concessional loan or syndicated loan, including export credits. “That why, the government should help or support the mining contractors on raising funds for smelter projects,” Martiono said.