Metal Mineral Smelter Industry in Indonesia 2011

INDONESIAN COMMERCIAL NEWSLETTER

February 2011

INVESTMENT IN METAL MINERAL SMELTER IN INDONESIA

Smelters are part of the process of production in metal mining industry. Generally, minerals produced from mines are still mixed with undesired materials. Smelters are needed to remove the materials and refine the metals such as tin, nickel, copper, gold, and silver until the metals meet the standard grade needed in the down stream industries.

Smelters are not always integrated with the production facility of the mining companies. In fact many mining companies' exports metal minerals as smelter are not yet available in the country.

Under the new Law No. 4 in 2009 on mineral and coal mining (Minerba), all mining companies are required to have their metal minerals processed and refined in the country. Exports of raw minerals will be banned starting 2014.

The Law No. 4/2009 on mineral and coal mining will boost investment in smelters to meet requirement.

The role of smelters on non ferrous metal industry

Copper, tin, aluminum and nickel are among the non ferrous metals produced from minerals through a process in smelters.

Smelters are metal processing facilities in the downstream sector. The types of products produced by smelters are copper anode, aluminum ingot, tin bars, tin granules, ferronickel and nickel in matte.

Not all types of smelters processing metal minerals are available in Indonesia. Indonesia has no smelters to process minerals like bauxite into aluminum.

Bauxite is exported to be processed abroad and he result is imported back into the country in the form of alumina. The aluminum smelter in Indonesia owned by PT Industri Asahan Aluminium (PT Inalum) processes alumina into aluminum in bars.

Copper

Copper is a metal widely use din industries. The product of copper smelter is copper cathode, a downstream product. Copper cathode is used as a feedstock in midstream industry to produce intermediate products - copper rod, copper plate and copper sheets. Rod is processed into copper wires and other downstream materials like cables; and copper plates and sheets are processed into copper foil in the downstream sector.

The basic material for copper metal is copper ores in the form of concentrate that has to be processed into copper cathode through the process of melting down into copper matte, cleaning from slag and purification.

Copper concentrate (Cu: 30%, S: 30%, Fe: 25%, Gangue minerals 15%) is processed by putting it through a pipe into the smelting furnace. In this furnace, the concentrate is mixed with oxygen rich air and heated to turn out melting copper in matte (Cu: 68%) and slag.

The matte is separated from slag in the second stove or the slag cleaning furnace. The separation is made by using liquid. The heavier material will settle. The matte is then oxidized in the third stove or the converting furnace to turn out blister copper (Cu: 98.5%).

The blister copper is processed further in the anode furnaces to turn out refined copper ready to be mold into copper strips by the machine of Hazelett Twin Belt Caster. The next process is copper strip is cut into sheets using he machine of hydraulic shearing machine of Mannesmann.

Aluminum

Aluminum is a light metal but tough and anti rust. The downstream product of aluminum is aluminum ingot.

In the midstream sector, the ingot is processed into a number of products including rod; billet; strip, and slab. Rod is a crude wire to be processed further into aluminum wires and cables.

Billet is a long bars used as a feedstock for aluminum pipes, and aluminum extrusion which is known with products like list profile

Downstream products of aluminum in he form of aluminum sheets like strip; foil; and tubes are produced from aluminum slabs. Slabs are crude and thick sheets that have to be processed into aluminum sheets in the midstream sector.

Bauxite ores go through a series of processes in the upstream sector to turn out downstream product in the form of ingot. First bauxite is processed into alumina or aluminum raw carbon, before being processed further in the aluminum smelter.

Alumina is put in a reaction with HF gas to turn out aluminum coke which will then be processed in the reduction furnace and mixed with anode butts before being heated. The materials are mixed with a pitch as adhesive.

The next process is molding in the Shaking Machine to turn out raw carbon blocks. The blocks are hen baked in the Baking Furnace. The baked anode is given handles.

Anode function as an electrode in the next process through electrolysis using big electric power in pots in the reduction facility. The handles are needed during the process of production.

Anode could be used for 30 days in posts and after that the anode butts are replaced with new ones. The butts could be reused after being processed. The output from the reduction facility is liquid aluminum ready to be cast into ingot.

Tin

Tin is widely used in industries. Tin in the upstream sector is in the form of ingot. Ingot is used as feedstock in midstream sector to produce slabs and rod.

Slabs will become downstream material in the form of sheets like foil, tubes and pipes. The end product of rod includes tin wires.

There are also intermediate materials like solder bars and solder wires as basic material in downstream industry like electronic industry.

The process of producing ingot starts with the cleaning of tin ores to increase the SN content of the ores. After the SN grade is increased, the ores are melted into tin metal in a smelter.

Before the melting down refining is made through crystallization and electrolytic refining. The end of product is tin metal in the form of ingot or bars.

Scheme.1 Tin's Industries Chart

Source: Industry ministry

Nickel

Nickel materials in the upstream sector include ferronickel and nickel in matte. Ferronickel is produced from lateritic ores and nickel in matte is a product of sulfide ores. The nickel content in nickel in matte is around 75% higher than nickel content of 20% in ferronickel.

Nickel is a metal used widely in industries such as feedstock for stainless steel, electric layers, no ferrous alloy, steel alloy, etc.

Existing Smelters

Investment in smelters began in the 1960s. Currently the country has around 7 metal smelters including copper, tin, and aluminum smelters.

The smelters are owned by PT Aneka Tambang (PT Antam), PT Industri Asahan Aluminium (PT Inalum), PT Timah, PT Inco and PT Freeport Indonesia (Freeport).

The first three companies general mining company PT Aneka Tambang (PT Antam), aluminum smelter PT Industri Asahan Aluminium (PT Inalum), and tin mining company PT Timah are wholly or partly owned by the state.

PT Inco is a foreign company producing nickel in matte, and Freeport is a US company producing copper and gold with copper smelter partly owned by the company.

PT Antam

PT Aneka Tambang has three smelters processing nickel ores into ferronickel. They are FeNi I; FeNi II; and FeNi III in Pomalaa, Southeast Sulawesi. The three factories have a total capacity of 26,000 TPA.

The smelters produce ferronickel with a content of 80% of iron and 20% in nickel. In the form of ingot and pellets. Most of the production is exported to Europe and South Korea. Around 70% of nickel is used in the production of stainless steel, and the rest use din various industries including battery, electronic, and aircraft industries.

Nickel ores used in the production of ferronickel are ones with a nickel content of 1.8% at the minimum and 25% at the maximum. The nickel ores are processed into calcine through pulverization, heating and reduction of acid content. After the process, the material is sent to the three factories

The technology used in the three factories is phyro-metallurgical which needs continued and big supply of energy. PT Antam has its own power plant with a capacity of 102 megawatts to meet energy requirement of the three smelters (FeNi I, FeNi II and FeNi III). The power generating plant was built and operated by contractor for Finland, Wartsilla.

PT Industri Asahan Aluminium (PT Inalum) ....

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