Indonesia launches $941 million smelter-grade alumina refinery

Image courtesy of PT Inalum

Indonesia’s President Joko Widodo launched a $941 million smelter-grade alumina refinery run by state miner Aneka Tambang (Antam) and state-owned aluminum producer Inalum in the country’s West Kalimantan province on Tuesday.

The production capacity of the refinery is 1 million metric tons of alumina per year, which would absorb 3.3 million tons input of bauxite.

Resource-rich Indonesia is keen to develop its domestic mineral processing industries instead of exporting raw ores. It has successfully attracted massive investment for nickel processing plants since it banned exports of unprocessed nickel in January 2020.

Indonesia banned the export of bauxite, the raw material for aluminum, last year in hopes of emulating the success in nickel.

“The domestic aluminum demand is 1.2 million tons, 56% is imported while we have the raw material. When these are all completed, we can stop the import,” Jokowi, as the president is commonly known, said in his remarks.

The companies are planning to expand the plant’s production capacity by another 1 million tons and build an aluminum plant to further process the alumina output, according to Hendi Prio Santoso, chief executive of MIND ID, the parent company of both Inalum and Antam.

The second phase of the alumina plant may cost around another $900 million in investment, while the future aluminum plant is estimated to cost $2 billion, Hendi added.

(By Bernadette Christina, Stanley Widianto and Fransiska Nangoy; Editing by Christian Schmollinger, Rashmi Aich and Mrigank Dhaiwala)

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