Chinese investors and suppliers are flocking to Indonesia in the lead up
to the archipelago nation's imposition of a ban on mineral exports in 2014.
Australian Mining reports that
the approaching ban has drawn a wave of ambitious Chinese suppliers who
confront a construction and investment slump back home, and are rushing to
provision local miners who must raise their ore processing capability prior to
the implementation of the looming export curbs.
Chinese investment in Indonesia
has risen vigorously over the past several years on the back of the ASEAN-China
Free Trade Area established in January 2010, which resulted in the world's
third largest free trade zone, comprised of China and the ten South-east Asian
member states of ASEAN.
Within a year of the free trade
area's establishment Chinese investment in Indonesia rose 31.7% year-on-year to
USD$2.9 billion.
Chinese firms are now investing
heavily in smelters and refineries, as well as striving to supply the
Indonesian resources sector with the machinery it needs.
Three Chinese firms recently
announced investment of AUD$9 billion in Indonesian iron ore smelters and
alumina refining plants, with Oriental Mining and Mineral Resources and Rui
Tong Investment investing $1.5 billion in direct reduced iron plants, and
Beijing Shuangzhongli Investment Management investing $7.1 billion in alumina
refining plants.
Chinese suppliers of equipment
such as pumps and heavy duty trucks also see promise in the Indonesian market,
as they are able to out-compete Western rivals on cheaper prices.
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