TEMPO.CO, Jakarta - Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan has requested that Japan build smelters in Indonesia. "I asked the Japanese to build a smelter in Sulawesi. They are going to send a team to consider Morowali, Central Sulawesi, to become their model," he said at a press conference on Friday.

According to Luhut, in the Morowali region there is a smelter with a very large capacity that was built by China. The smelter processes nickel ore, which is used to produce high value added products, such as stainless steel.

Therefore, Luhut, who is a former coordinating minister for politics, has challenged Japan in order not to be out-performed by China. "Yesterday, Japan asked (to be allowed to export nickel and bauxite) but I told them 'if others can do that (build smelters) why can't you?'. I told them that they could build whatever type of smelter they want," he said.

In his working visit to Japan on December 20-21, Luhut said he met with Prime Minister Shinzo Abe and discussed the Indonesian government's plan to end the export of mineral ores.

According to Luhut, the ban on exports of mineral ores was enacted for the welfare of the Indonesian people, through the building of a national processing industry capacity. "I explained to Abe that it was done for the welfare of the people of Indonesia," he said.

Government Regulation (PP) No. 1 of 2014 on the Implementation of Mineral and Coal Mining Activities stipulates the obligation of the downstream mining sector, where raw mineral exports will be banned starting in January 2017.

Luhut previously emphasized that the government will not change its plan to end the export of nickel ore and bauxite beginning in 2017. The government will ban the export so that Indonesia's large reserves of nickel and bauxite can be fully utilized in the country through downstream development activities.

By processing minerals domestically, Indonesia will gain added value in the form of direct exports of raw minerals. In addition, Indonesia will not need to rely on other countries to import stainless steel products.

ANTARA