Little Amethyst Girl

Selasa, 24 Maret 2015

Forbidden to “Sell” the Homeland

Theme: #Fact 2 -> PT INCO sells raw nickel ores

Forbidden to “Sell” the Homeland

PT International Nickel Indonesia Tbk (PT INCO)—which the name has been changed to be PT Vale Indonesia Tbk—is one of the main nickel producers in the world. Nickel is a kind of multipurpose metal which is important in improving standard of living and encourage the economics growth. Nickel is mainly used in nickel plating, chemical nickel plating, aluminum coloring, battery material and activator, etc.

PT INCO was founded on July, 25^th 1968, and started its commercial business activities in 1978. Its factory is located in Sorowako, South Sulawesi. The majority shareholder of INCO is Vale Canada Limited (58,73%) and Sumitomo Metal Mining Co, Ltd (20,09%). Vale Canada Limited is a holding company of INCO, while Vale S.A is a company which is established in Brazil, is the main controller of INCO. Based on a company’s article of association, the scope of INCO’s activities are exploration, mining, processing, saving, transporting and marketing of nickel and other related mineral products. Nowadays, INCO is producing matte form—semi-finished goods of nickel—which is made from lateritic ore.

Lately, government complain that export of raw ores are increasing. Export of raw nickel ores are increasing up to 800%. Government decide to stop export of raw nickel ores and start to process raw nickel ores in to steel raw materials which are still imported from Japan and Korea all this time.

When SBY was governing the Indonesian governent, he authorized a regualtion that mining companies in Indonesia must processed raw ores in Indonesia and prohibitied to export raw ores. Consequently, the export of raw ores was decreasing and the GDP of Indonesia was increasing. It became a good-news. But some time ago, Jokowi has removed that regulation—which the time was together with the case of BW and BG.

PT INCO is producing the first processed ores in to raw materials for the further nickel process and 70% of that first processed ores product is exported. One of the Indonesian export destinations of this product is Singapore. Indonesia sells to Singapore with the price $ 18.225/matte, but Singapore exports to Europe with the price $ 400.000/matte after having some treatment at Singapore Nickel Technology Center.

It is very ironic, considers Indonesia has reserves of nickel up to 3,2 billion tons or five percent from the world nickel reserves, but we are not able to process it in to finished products. So far, Indonesia undergoes technological constrains in the development of nickel and still lack of interest in nickel processing into the refined products ready for use.

The government should be able to increase the value-added of natural resources, especially for non-renewable resources such as minerals. A process to increase the value-added is producing natural resources into the highest point of value. The first step is we must process the natural resources in Indonesia. The next step is we must utilize the Indonesia’s mining. So the natural resources are not only processed in Indonesia but also used by the industries in the country. Applying a tax barrier would help force mining companies to process the raw ores in the country by imposing high export duties. Surely, the mining companies should have the smelter. Government suggest that mining company must build smelter immediately to increase its metal content until it reaches the level that meets the standards of the raw materials for the further nickel process.

Some advantage that we get if we able to process raw nickel ores into the finished product is a higher selling price. Of course, it will be increasing GDP and welfare of Indonesia. It is pity if we are not able to process our own natural resources and allow the other nations to enjoy the benefits.

The main obstacle in term of the obligation of minerals process is the interest of the authority. Many authoritative people not only exploit nickel in Sulawesi, but also exploit the Indonesian wealth. There are so many smart people in Indonesia, but actually their acts do not reflect smart people, so it causes a lot of harm for Indonesia, added with their ulterior motives. Precisely, the business and political power can never be solved by the state.

Reference