“Indeed, if we look at it, almost 100% of the nickel downstream is from RKEF (Rotary Kiln-Electric Furnace), whose process is pure metallurgy that produces Nickel Pig Iron and straight ferronickel. Today, 90% of those entering cooperative smelters come from China,” Irwandy told reporters from the Ministry of Energy and Mineral Resources on Friday (8/18).
Even so, Irwandy revealed that there are still several domestic companies doing downstream business without using Chinese technology. For example, PT Vale Indonesia Tbk uses Canadian technology.
In addition, Irwandy said, downstream nickel, which comes mainly from Chinese companies, still benefits Indonesia. Even based on BPS data, nickel exports with the downstream program increased by more than USD 4 billion, about five times compared to 2015.
“Indeed, there will be other partners working together in the future, not just from China, especially later the new RKEF that has been approved,” Irwandy said.
RI Nickel is called beneficial for China’s industrialization
Faisal Basri said the government should implement an industrialization strategy, not just downstream. He said the nickel downstream in Indonesia only processes nickel ore into Nickel Pig Iron (NPI) or ferronickel, 99% of which is exported to China.
“So the endorsement in Indonesia clearly supports industrialization in China,” Faisal said.
Faisal said nickel products could still be processed in a more modern way, as Indonesia currently accounts for only 10% of value added. “Really, we don’t get much downstream, a maximum of 10%. 90% goes to China,” he explained.
Faisal Basri’s statement was denied by President Jokowi. Jokowi said there was IDR 510 trillion in value added that the state got. The realization of nickel downstream value addition is Rs 510 trillion compared to raw material export taxes which reach Rs 17 trillion per year
Jokowi disclosed that the state not only derives revenue from taxes but also receives revenue from VAT, corporate tax, employee income tax, royalties and export duties .
“Just imagine that this country only collects taxes. Levying taxes from 17 trillion rupees is equivalent to levying taxes from 500 trillion rupees, how big? said Jokowi during the Jabodebek LRT test on Thursday (10/8).
“Because from there, downstream, you can get VAT, corporate tax, employee income tax, corporation tax, royalties, export duties, state non-tax revenue, all of that is there. Just try to calculate from Rp. 17 trillion to Rp. 500 trillion, which is bigger? Jokowi said.
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