Supervision of Physical Development Progress of PT. CNI’s Processing and Refining facility (Smelter)
On Thursday October 31, 2019 PT CNI was visited by distinguished and integrated team from Ministry of Energy and Mineral Resources (MEMR), in accordance with Letter of assignment dated October 29, 2019 No. 1906/04.03/DBM.OP/2019. The purpose of this visit was to supervise and verify the physical development of PT CNI’s smelter facility. MEMR Regulation No. 25/2018, Article 50 to 52 stated mining companies with, among others, mining license or IUP of Production Operation have to show the progress verification of smelter facilities, done by an independent evaluator, in order to attain an export recommendation from the Director General of MEMR.
PT CNI has appointed PT Surveyor Indonesia (Persero) (PT SI) as the independent verifier to evaluate the smelter physical progress for the April – September 2019 period. On October 22, 2019 PT SI issued a verification report affirming the realization of physical progress at 24.71% from the target of 26.52%, or 93% of the target. The verification was passed successfully and complied the minimum 90% progress requirement as stated in MEMR Regulation No. 25/2018. Overall physical progress of PT CNI’s smelter development was reported to be 43.35% as of October 2019.
Leading the integrated team of this supervision visit was Mr. Sahid Junaidi (Inspector II Inspector General MEMR), and the team consisted of:
- Directorate of Mining and Mineral Resources,
- Surveyor Indonesia (Independent Verifier),
- Sucofindo (Independent Verifier),
- TEKMIRA (Mineral & Coal Technology),
- and representatives of the Department of Energy and Mineral Resources of Southeast Sulawesi.
PT CNI acknowledged the moral imperative of the visit and prepared an integrated team led by the Mr. Derian Sakmiwata, President Director of PT CNI. The team consisted of:
- CNI Officers (from Head office in Makassar, Jakarta Office, Kolaka and site field’s offices)
- PP (EPC Contractor)
- PLN (Power Provider)
The verification conducted at Rumah Manado (site office). PT CNI began presentations that entail:
- Video presentation of RKEF & HPAL refining and processing facilities, and the groundbreaking ceremony;
- PT CNI Vision and Mission aimed at mineral downstream industry (RKEF Smelters and HPAL) which would certainly absorb thousands of local Indonesian workers;
- All legal aspects which includes EPC agreements and Purchase Order with PT. PP, ENFI, and PT. PLN;
- Metallurgy aspects and the selection of Smelter technology, namely RKEF with Rectangular furnace as the latest and most efficient and optimized technology. This also highlights the seriousness in building the smelting facility;
- PT CNI’s JORC Resource and Reserves, Feasibility Study and Environmental Impact Assessment (AMDAL) that PT CNI has done. Reports from this supporting documents showed that the company is able to support the RKEF and HPAL operating period for at least several decades;
- Manpower that is currently employed by PT CNI and thousands more during construction and operation of smelter;
- Aspect of the commercial development of the smelter such as sources of funding and how the project is economically feasible;
- PP described the work current progress. PT PP is also waiting for the piles to begin the piling works;
- PLN explained the SPJBTL (electric power purchase agreement) of 350MW which is enough to power PT CNI’s 4 lines of RKEF smelter. PT CNI has paid the Down Payment and began the installment payments. It also shows PT CNI’s commitment to fulfilling Energy requirements of the smelter project.
There were short discussions following the presentations, followed by field / site supervision that afternoon. The integrated team observed the construction area, supporting facilities area which consists of Sucofindo’s Laboratory, employees dormitory and canteen, port (special Terminal) in Babarina and Wolo area.
The team then headed back to the site office to prepare and to verify the contents for Official Statements to be signed.
The integrated team and PT CNI team had long discussions which evolved around the topic of revision in the S-Curve to measure project’s progress, equipment purchase order from ENFI and power supply change from building a captive coal-fired to electricity by PT PLN. Nevertheless, both parties reached an agreement and signed the Official Statements at midnight.
The Official Statements will be the official report to the government on the integrated team’s site supervision and verification.