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Jakarta (AFP) Aug 30, 2012
Three Chinese firms will invest up to $8.6 billion in Indonesian smelters, Jakarta's industry minister said Thursday, as a ban on the export of raw minerals from Southeast Asia's biggest nation looms.
"Oriental Mining and Minerals Resources and Rui Tong Investment will invest $1.5 billion in direct reduced iron plants with a capacity of six million tonnes," state-run news agency Antara reported Mohamad Hidayat as saying.
"Beijing Shuangzhongli Investment Management will invest $7.1 billion in alumina refining plants with a production capacity of 1.8 million tonnes", the minister added.
The investment comes after a string of similar deals as China deepens its presence in Indonesia before the resource-rich nation implements a blanket ban on ore exports, slated for 2014.
Indonesia has in the past year tightened protectionist policies in the mining sector, obliging foreigners with new mining permits to divest a controlling stake in assets after 10 years of production.
It also imposed a 20 percent tax on raw mineral exports, and obliged ore exporters to invest in Indonesian smelters.
Hidayat said the $8.6 billion investment would create 46,000 new jobs for Indonesians.
A subsidiary of the government-backed Aluminum Corporation of China, or Chalco, this week signed a deal with Indonesia's Indonusa Dwitama to develop a refinery for bauxite, the raw material for aluminium.
Earlier this month, Bosai Minerals Group, China's largest bauxite producer, announced a $1 billion investment to build a similar plant in Indonesia.
Global Trade News
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