Following the implementation of regulation concerning the requirement for a raw mineral producer to have a smelter, per July 2018 the government will apply financial sanction or fines onto the raw mineral producers that have not built mineral purification plant or smelter. The sanction will be imposed by the Ministry of Energy and Mineral Resource (ESDM) onto the raw mineral producers that have received a quota of export of nickel and bauxite.
The financial sanction is complying with the regulation of the Regulation of the Minister of ESDM (Permen) No. 25/2018 enacted on May 3, 2018, concerning the mineral and coal mining operation. As stated in Article 55, paragraph 8, the sanction will be in the form of 20% fines from the cumulative export value of mineral sales.
In the present time, according to the Ministry of ESDMN, no mining company is yet charged with financial sanction for the progress of their smelter construction is as in the work schedule.
Referring to the Strategic Plans of the Ministry of ESDM Year 2015-2019, the government is targeting to have a total of 30 units of smelters constructed during the period.
During the first year, the target is for construction of 12 smelters. In the second year, the target is for nine smelters. Meanwhile, in 2017, there will be 6 smelters constructed. In the following two years, there will be 2 smelters and 1 smelter built. Bauxite processing facilities will be located in Kalimantan Barat, meanwhile, nickel processing facilities will be built in Sulawesi Tenggara, Sulawesi Selatan, and Maluku Utara.