Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Indonesian President Joko Widodo on Friday launched the second phase of an industrial complex in Central Java intended to attract investors looking to diversify their supply chains away from China.
Batang industrial park already hosts nearly 20 companies in 10% of its total area of 4,300 hectares, including South Korea’s LG Energy Solution and glass maker KCC Glass, and they have started construction or have pledged to build factories there.
Jokowi, as the president is commonly known, said companies have invested 14 trillion rupiah ($860 million) so far.
Now another 400 hectares will be offered for investors to will create manufacturing jobs, Jokowi said.
“We have to open as many jobs as possible for our people,” he said.
Companies investing in the Batang park can get tax breaks for imports of machinery, according to tax rules on industrial parks.
LG Energy Solution will start producing cathode in September, an essential component for electric vehicle batteries, Jokowi said.
He previously said the company would build a $2.4 billion factory in the Batang park to produce 220,000 tonnes of precursor and 42,000 tonnes of cathode per year.
That would provide the main raw material for its planned 200 gigawatt-hours battery cell plant in the industrial town of Karawang in West Java, worth $3.6 billion, he said.
($1 = 16,285.0000 rupiah)
(By Stanley Widianto and Stefanno Sulaiman; Editing by Ros Russell)
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