| JAKARTA, June 19
JAKARTA, June 19 Bauxite producers are delaying
plans to build alumina refineries in Indonesia due to legal
uncertainty over a mineral ore export ban imposed five months
ago, government and industry officials said.
Indonesia's Constitutional Court has yet to decide on a
legal challenge against a Jan. 12 export ban on bauxite, nickel
and other mineral ores imposed by the government to force miners
to build refineries and processing plants.
Before the ban, Indonesian bauxite exports accounted for
about 12 percent of global aluminimum production, with China
taking the bulk of shipments for processing into alumina, an
intermediate stage in the production of aluminium.
As many as five alumina refinery projects are underway in
Indonesia, industry officials said, but the legal uncertainty
means firms have slowed their construction plans for the
refineries, which can cost as much as $1 billion each.
"They are worried if the court allows exports again, bauxite
producers will be able to resume shipments of raw materials.
Investors want the ban to remain," Dede Suhendra, Mineral
Enterprise Director at the mining ministry, told reporters.
The case, brought by Indonesia's Mineral Entrepreneurs
Association, has been put aside by the country's Constitutional
Court as it focuses its attention on election-based lawsuits.
The presidential election is on July 9.
Indonesia has only one chemical grade alumina refinery,
opened in April by state-owned PT Aneka Tambang (Antam).
PT Well Harvest Winning Alumina, a joint venture between
Indonesian conglomerate Harita Group and China's Hongqiao Group,
was initially expected to begin operations at its refinery in
West Kalimantan in mid-2015.
The start-date has now been pushed back to early 2016 at the
earliest, said Erry Sofyan, director of PT Harita Prima Abadi
Mineral, a unit of the Harita Group.
Sofyan added that he hoped the government would allow
companies building refineries to export some bauxite to enable
them to obtain the necessary funds for their projects.
PT Bintan Alumina Indonesia is hoping to start operations at
its alumina refinery, with a capacity of 2 million tonnes a
year, by early 2017, said company director Santony.
Suhendra said the government was optimistic that the court
will ultimately decide in its favour, allowing refinery projects
"If the court decides to not change the ban, then I think
things will go smoothly next year," he said. "I don't think the
Constitutional Court will cancel the ban."
(Writing by Randy Fabi; Editing by Richard Pullin)