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To be Stopped, Copper Exports Reach a Record High of IDR 138 T (9.24 Billion USD) in 2022


Jul 25, 2013
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To be Stopped, Copper Exports Reach a Record High of IDR 138 T in 2022​

Story from Happy Fajrian • 5 hours ago


The Central Statistics Agency (BPS) noted that copper ore exports throughout 2022 reached 3.13 million tons, an increase of up to 40.35% from the previous year with a total of 2.23 million tons.

Meanwhile, the value of copper exports throughout 2022 is the highest record in Indonesia's history, reaching US$ 9.24 billion or equivalent to IDR 138.43 trillion, assuming a rupiah exchange rate of IDR 14,976 per US dollar.

The skyrocketing achievement of copper ore exports is allegedly due to the soaring demand for raw materials for processed products in the global industry. Especially in the needs of electrical infrastructure and battery development to the production of electric vehicles.

Executive Director of Energy Watch, Daymas Arrangga, said that the development of the battery and electric vehicle ecosystem in parallel will increase the demand for electricity transmission supply.

This condition automatically has an impact on significantly strengthening the demand for raw materials for supporting components such as cables and electricity transmission, which are generally produced from copper minerals.

"The battery ecosystem cannot run alone, it definitely needs support such as transmission and wiring. Raw materials for the production of supporting goods must also be available," said Daymas when contacted by telephone on Wednesday (25/1).

Japan's Main Destination for RI Copper Exports​

The majority of Indonesian copper ore buyers come from East Asian countries which contribute a portion of up to 2.09 million tons or 66.77% of the total copper ore exports abroad throughout 2022.

Japan became the largest export destination of Indonesian copper ore commodities with a total of 761.28 thousand tons from January to December 2022. The recorded transaction value reached US$ 2.28 billion. The purchase with the largest volume occurred in April amounting to 132.93 thousand tons.

Then there is China which occupies the second position through the total copper ore export volume of 597.36 thousand tons worth US$ 1.77 billion. The largest export occurred in August with a shipment volume of 109.97 thousand tons.

The number three position is South Korea through exports of 530.24 thousand tons of copper ore throughout 2022 worth US$ 1.63 billion. The three countries mentioned at the beginning are consistent as repeat customers and have never been absent from January to December 2022.

Furthermore, there is India in the fourth order with a total export volume of 284 thousand tons worth US$ 872 million. Furthermore, there is Taiwan which exports Indonesian copper ore amounting to 209.5 thousand tons with a transaction value of US$ 568 million.

Meanwhile, malaysia is also a potential market for Indonesian copper ore with a sales volume of 199.5 thousand tons worth US$ 559 million.

The Ministry of Energy and Mineral Resources noted that when it was still an ore, copper was only at a price of US $ 4.36 per ton. The selling price will increase to US$ 1,365 per ton if processed into copper concentrate.

Moreover, the price of copper commodities will be of higher value if it has passed the refining phase into copper cathodes at a price of US $ 6,049 per ton. The end product is copper cable with a selling price of up to US$ 13,000 per ton.

Indonesian Coppers production is dominated by 3 companies

1. PT Freeport Indonesia (51 percent owned by Indonesian government, 49 percent foreign companies/USA)

2. PT Vale Indonesia (20 percent owned by Indonesian government, 20 percent by public (stock exchange), 60 percent owned by foreign companies/Brazil and Japan)- Indonesian government is expected to get another 11% stakes from foreign companies at minimum next year.

3. PT Amman Mineral (Majority owned by national company (Medco Group).

Three of them have already been constructing new smelter to absorb their copper production

Freeport new smelter

Hilmi Panigoro, Medco Group CEO, said production in 2022 is doubling 2021 production and will reach peak in 2023. Smelter is being built and projected to be completed around 3 years from now


Supporting Copper Export Ban, Freeport Accelerates Smelter Development​

Export Ban on Copper, Copper, Smelter, Downstream, Freeport

Freeport Indonesia
President Director of PT Freeport Indonesia Tony Wenas at the smelter project site in Gresik, East Java.

Freeport seeks to enable the copper smelter in Gresik to operate commercially by 2024 to support the government's downstream policy.

By Muhamad Fajar Riyandanu
January 16, 2023 11:48 AM

PT Freeport Indonesia (PTFI), positively assesses the government's plan to expand the scope of downstream mineral commodities by implementing a copper export ban policy in the middle of this year.

For this reason, Freeport is trying to complete the construction of a mineral processing and refining plant or copper smelter project in Gresik, East Java, which was stalled due to the Covid-19 Pandemic.

Vice President Corporate Communications PT Freeport Indonesia Riza Pratama said that smelter construction is targeted to be completed substantially by the end of 2023, with an increase in production in 2024.

The construction project of PT Freeport's refining facility with a capacity of 1.7 million tons per year was established in the Java Integrated Industrial and Port Estate (JIIPE) Gresik industrial area.

"We support the government's downstream policy, and are developing large investments in the construction of domestic smelting and refining facilities," Riza told Katadata.co.id via text message on Sunday (16/1).

The copper processing plant began construction in 2019 and is projected to be operational by the end of May 2024. The construction progress of the smelter until the end of December 2022 has reached around 50% After that, there will be a gradual increase in output until commercial operation by the end of 2024.

"Previous development activities were limited due to the pandemic, but now we are making very good progress in completing the project as quickly as possible," riza said.

Previously, President Joko Widodo planned to ban copper exports by the middle of this year.
The move is part of President Jokowi's industrialization plan for the remainder of his reign.
"Regarding the policy of banning nickel exports lost at the WTO, we continue. Instead, we stopped bauxite in December last year, and in the middle of the year, we may add (with) more copper exports (ban)," said President Jokowi at the 50th PDIP Anniversary, Tuesday (10/1).

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[Updated at 5:51 p.m. on Wednesday, Dec 21, 2022, to add data in the final three paragraphs]

Indonesia to Ban Bauxite Exports in June 2023​

DECEMBER 21, 2022

Jakarta. In a surprising move, the Indonesian government has announced a ban on all bauxite exports starting in June 2023 to encourage domestic processing industries.

President Joko "Jokowi" Widodo announced on Wednesday, stating, "Starting in June 2023, the government will implement a ban on bauxite ore exports and encourage the processing and purification of bauxite ore within the country."

He was accompanied by the Coordinating Minister for Economic Affairs, Airlangga Hartarto, and the Minister of Energy and Mineral Resources, Arifin Tasrif, when making the statement from the Merdeka Palace in Jakarta.

This unexpected decision has sent shockwaves through the global aluminum industry, as Indonesia is among the world's largest exporters of bauxite, the raw material used to produce aluminum. The ban is expected to significantly impact the global aluminum market, leading to price increases and supply disruptions.

Jokowi emphasized the government's commitment to sovereignty over natural resources and increasing value-added within the country, particularly in creating as many job opportunities as possible, increasing foreign exchange receipts, and promoting more equitable economic growth.

"Therefore, the government continues to strive to increase the country's processing industry of natural resources. Raw material exports will continue to be reduced, and the downstreaming of natural resource-based industries within the country will continue to be increased," he said.

The government has implemented a ban on nickel ore exports since January 1, 2020, with positive results.

Widodo noted that the value of nickel exports, which were only Rp 17 trillion ($1.1 billion) at the end of 2014, rose to Rp 326 trillion in 2021, an increase of 19 times. The value of nickel exports is expected to exceed Rp 468 trillion this year.

"This is only one commodity. This kind of success will be emulated for other commodities," Jokowi said.

The domestic industrialization of bauxite is expected to increase state revenues from Rp 21 trillion to approximately Rp 62 trillion.

"The government will continue to consistently carry out downstreaming within the country so that value-added is enjoyed within the country for the advancement and welfare of the people," Jokowi said.

Indonesia held a bauxite reserve of about 1.2 billion metric tons in 2021, or 3.75 percent of the global reserves, and the 7th largest in the world after Guinea, Vietnam, Australia, Brazil, and Jamaica, data from the US Geological Survey (USGS) showed.

The Southeast Asia country mined 18 million metric tons last year, down 20 percent from 20.8 million a year earlier. According to the USGS, Indonesia's bauxite production accounted for only about 4.62 percent of the global supply in 2021 of 390 million metric tons.

Indonesia exports most of its ore overseas and is currently the second-largest exporter in the world after Australia, accounting for about 31 percent of the export market.



The ongoing construction of Freeport Indonesia’s Manyar Smelter at the Java Integrated Industrial and Port Estate in Gresik. (B Universe Photo/Primus Dorimulu)

Freeport's Manyar Smelter to Pave Way for Indonesia’s EV Ecosystem​

JANUARY 27, 2023

Jakarta. Mining giant Freeport Indonesia recently said that its smelter for copper -- a critical component for electric vehicle or EV production -- at the Java Integrated Industrial and Port Estate in Gresik would finish construction by the end of this year.

Once completed, the Manyar Smelter could give a major boost to Indonesia's dream of building an EV ecosystem. The construction is halfway done, specifically 51.7 percent complete as of the end of December 2022.

"So the downstream and upstream sectors would become one. Refining copper domestically would boost the added values for the copper concentrate from the current 95 percent to 100 percent,” Freeport Indonesia president director Tony Wenas told BTV in a recent interview.
“And also contribute to the EV ecosystem that is currently being built in Indonesia. Copper will play a pivotal role in the EV ecosystem,” Tony said.

The $3 billion Manyar Smelter is expected to process 1.7 million tons of copper concentrates a year. Freeport’s existing smelter PT Smelting has an annual capacity of a million tons of copper concentrates. Combined, Freeport Indonesia’s copper concentrate processing capacity can reach 3 million tons a year.

Freeport Indonesia claimed the Manyar plant would become the world’s largest single-line smelter. The Manyar Smelter is slated to begin commercial operations in end-2024, marking the end of copper concentrate ore exports from Freeport Indonesia.

President Joko "Jokowi" Widodo is ramping up Indonesia’s domestic unprocessed mineral ore smelting for greater added value to the economy and also to build the country's EV ecosystem.

According to Investor Daily, the metals needed for EV battery production include graphites (28.1 percent), aluminum (18.9 percent), nickel (15.7 percent), copper (10.8 percent), steel (10.8 percent), manganese (5.4 percent), cobalt (4.3 percent), lithium (3.2 percent), and iron (2.7 percent). Most of these metals can be found in Indonesia.

Jokowi earlier this year also signaled that a full ban on unprocessed copper would be in place starting in mid-2023. Jokowi said that he wanted his successor to carry on with the downstream policy, despite opposition from the European Union (EU).

Since 2020, Indonesia has banned the export of unprocessed nickel ores -- another crucial component for EV batteries. The decision led to the EU filing a lawsuit against Indonesia at the World Trade Organization. Indonesia lost the nickel lawsuit but has launched an appeal.


Gold Demand Soars To Hit 11-Year High In 2022​


By ZeroHedge - Feb 01, 2023, 3:30 PM CST

Gold demand grew by 18% to 4,741 tons in 2022, the highest demand in 11 years, according to data compiled by the World Gold Council.
Massive central bank purchases coupled with strong retail investor buying and slowing outflows from ETFs drove overall demand higher.

Gold demand last year was on par with 2011, “a time of exceptional investment demand,” according to the WGC.

Central banks bought 1,136 tons of gold last year. It was the second-highest level of net purchases on record dating back to 1950. It was the 13th straight year of net central bank gold purchases.

Central banks added 417 tons of gold to their reserves in Q4, bringing the total in H2 to 862 tons. This was due to a combination of reported buying by central banks in Turkey, India, Uzbekistan, and many other emerging markets, along with an estimate for significant unreported buying. Central banks that often fail to report purchases include China and Russia. Many analysts believe China is the mystery buyer stockpiling gold to minimize exposure to the dollar.

Related: No, The World Isn’t Running Out Of Lithium
Meanwhile, the Chinese central bank officially waded back into the gold market after going silent in 2019. The People’s Bank of China reported 62-ton purchases in both November and December, raising its total gold reserves to over 2,000 tons for the first time.

According to the World Gold Council, there are two main drivers behind central bank gold buying — its performance during times of crisis and its role as a long-term store of value.
It’s hardly surprising then that in a year scarred by geopolitical uncertainty and rampant inflation, central banks opted to continue adding gold to their coffers and at an accelerated pace.”
Investment demand for gold was also strong in 2022, totaling 1,107 tons, a 10% increase year-on-year.
Gold bar and gold coin demand grew by 2%, building on strong demand in 2021. In total, global investors bought 1, 217 tons of gold bars and coins.

The second half of the year was particularly strong for bar and coin buying, charting two successive quarters of demand of around 340 tons for the first time since 2013.
According to the WGC, “The need for wealth protection in the global inflationary environment remained a primary motive for gold investment purchases.”

Investors in the West had a particularly strong appetite for gold and broke an annual record. Combined US and European purchases of gold bars and coins hit 427 tons. That exceeded the previous record of 416 tons set in 2011.

Institutional investors who primarily buy and sell paper were not as bullish on gold last year. Despite rampant price inflation, they bought into the narrative that the Federal Reserve was going to win the inflation fight. They sold gold every time the Fed hiked rates. As a result, gold ETFs charted outflows of 110 tons. That was an improvement over the 189-ton outflow in 2021.
The World Gold Council summed up the dueling narratives in the investment market.
As well as underlying support from geopolitics, gold investment was impacted by a combination of multidecade high inflation, especially in Western markets, and the resultant aggressive rate hikes by the Fed and other central banks. Bar and coin investors focused on the former and sought the safety of gold as a hedge against inflation. In contrast, gold ETF investors reduced their holdings, especially in the second half, focusing on gold’s rising opportunity cost as central banks across the globe imposed hefty rate hikes and the US dollar surged.”
Gold jewelry demand softened in 2022, falling 3% to 2,086 tons. Rising gold prices in the fourth quarter drug down demand.

Demand for gold in technology saw a sharp Q4 drop, driving a full-year decline of 7%. According to the WGC, “deteriorating global economic conditions hampered demand for consumer electronics.”

Gold used in the electronics sector fell 18% y-o-y to 58 tons during the final quarter of the year. According to the World Gold Council, it was the largest quarterly y-o-y fall in the sector since 2009 – a direct consequence of the unprecedented combination of challenges the industry is currently facing.

The gold supply was up modestly, rising 2% on the year, with mine production inching up 1% to a four-year high of 3,612 tons. Even with the rebound in mine output, it still hasn’t recovered to the 2018 record.

Now that the COVID-19 production disruptions and widespread China safety stoppages of 2021 have reversed, this lack of production growth gives further credence to claims that gold production is close to plateauing.”
Here’s how the World Gold Council summed up gold’s performance in 2022.

Gold’s diverse uses, in jewelry, technology and by central banks and investors, mean different sectors of the gold market rise to prominence at different points in the global economic cycle. This diversity of demand and self-balancing nature of the gold market underpin gold’s robust qualities as an investment asset.”

By Schiffgold.com via Zerohedge.com


Amman Mineral Smelter Development Reaches 51 Percent​

Story from Ahmad Fikri Noor • 31 minutes ago


REPUBLIKA.CO.ID, JAKARTA -- PT Amman Mineral Industri (AMIN) continues to be committed to completing the smelter project located in West Sumbawa Regency (KSB), West Nusa Tenggara. Until January 2023, this project continues to show development progress with investment realization of more than 51 percent. This shows the company's commitment to continue the construction of the smelter, so that it can complete it by the end of 2024. The verification process by an independent third party is still ongoing.

President Director of AMIN, Rachmat Makkasau explained, the achievement in the January 2023 period was based on the calculation of the realization of the budget needs for the smelter, which includes physical development and also the purchase of equipment and machinery for operations. Rachmat explained that the realization of 51 percent refers to the absorption of costs that have been incurred by the company.

The development of the smelter project has been in the range above 51 percent. The constraints of the Covid-19 pandemic and the energy crisis in Europe, which are external factors, have caused logistical constraints and the mobilization of human resources (HR). Thus, the original target of completion of the smelter in 2023 will not be able to be carried out.

"We will continue to strive to overcome various existing external obstacles and strive to speed up the construction process, so that a realistic target of the end of 2024 can be achieved," said Rachmat in a written statement, Monday (13/2/2023).

The Amman smelter project is the largest contributor to KSB's investment realization in West Nusa Tenggara Province in the 2022 period. Secretary of the KSB Investment and One-Stop Integrated Services (DPMPTSP) Office, Slamet Riadi explained that the realization of NTB investment in 2022 reached IDR 21.61 trillion, where this realization exceeded the national target of the Investment Coordinating Board (BKPM) of IDR 18.5 trillion and the Regional Medium-Term Development Plan (RPMJD) target of IDR 15.4 trillion.

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