ANALYSIS OF THE COPPER INDUSTRY CHAIN IN INDONESIA USING A SYSTEM DYNAMICS APPROACH

• Main Author: Rahmahwati, Atika
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/54420
• Institution: Institut Teknologi Bandung

As a non-renewable natural resource, the amount of copper is limited so that it needs to be well-managed in order to be beneficial for the nation. At present, the copper industry is still exporting copper concentrates since the smelter capacity in the country is only capable of processing one-third out of the national copper total production. Moreover, a half of national copper cathodes are processed by intermediate industries, and the rest is exported. On the other hand, Indonesia is still importing copper-based semi-finished products inasmuch as there are still undeveloped copper intermediate industries. With the current condition of the industrial chain, this shows that the goal of increasing mineral value added as stated in PP. 23/2010, among others, to ensure the availability of domestic industrial raw materials has not been achieved. Smelter and refinery industries have been supported to continue developing since the act of minerals and coals (UU Minerba) and its derivatives, which have obliged the processing and the refining of minerals in the nation, were established. Furthermore, the construction of new copper smelters and refineries will have an impact on increasing the supply of copper cathodes and their by-products. Therefore, in regards with assessing the copper industry chain and and estimating the increase in value added. This research will develop a system dynamics model. It is selected because it can explain the complex structures and behaviors in the phenomena of the copper industry chain . In this study, the Indonesian copper industry chain model consists of four subsystems, namely mining, smelter and refinery, intermediate industries, and consumption. In the final year (2030) of the mining subsystem simulation, the amount of reserves is at 1,239 million tons, and there will be a shortage of copper in the next 20 years (calculated from the research year), so it is necessary to increase the discovery of new reserves to ensure domestic supply of copper. Furthermore, during the simulation period of 2020 to 2030, a total value added along the copper industry chain will be obtained as much as USD 70,422,840,000, if the smelter and refinery are completed in 2023 to process all domestic concentrates. However, if smelters and refineries are not built domestically until 2030, concentrate exports will still be carried out. Hence, Indonesia loses a value added of USD 6,861,520,000. In addition, Indonesia loses a value added of USD 8,707,930,000, if smelters and refineries as well as intermediary industries are not developed domestically.