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"We think if they have placed the money here, they wouldn't possibly cancel the plan to build the smelter," he said.
Thamrin said the so-called "assurance" money must equal to the estimated construction cost of the smelters. If the project is half-way completed, companies will have to show how the other half of the funding will be spent, he said.
If the project remains in a feasibility study, the remaining funds in the bank must equal the remaining balance of the project.
"If the project is worth $1 billion, that's the amount that must be placed in banks.... But if that's too burdensome, they can [pay in] installments like $250 million per year until the project is completed," Thamrin said.
He also revealed that 97 of the 125 smelters investors plan to build, have made only very limited progress. Total investment for these smelters amount to $16.82 billion, Thamrin said.
The announcement came on the heels of a deal signed by Lippo Group, a conglomerate with diversified business interests, to partner with Chinese Shenhua Group on construction of a smelter in Cirebon, West Java. The news was announced by Industry Minister MS Hidayat, who was present when the deal was signed in Beijing, China, on Friday.
The project marks Lippo's first entry into the smelting business. The conglomerate is well known for its involvement in property, retail and information, communication and telecommunication businesses, including Berita Satu Media Holdings, parent company of the Jakarta Globe.
"Mochtar Riady will represent Lippo to sign the deal. I was invited to witness it," Hidayat said in Seoul, South Korea.
Mochtar is the founder and chairman of the Lippo Group, which owns the Jakarta Globe.
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