Indonesia state-owned miners PT Aneka Tambang Tbk (Antam) and alumina producer PT Indonesia Asahan Aluminium (Inalum) have signed an memorandum of understanding (MoU) with China Aluminum Co. (CHALCO) to develop a $1-billion smelter-grade alumina (SGA) refinery in Mempawah, West Kalimantan.
The company’s director Johan Nababan told DEALSTREETASIA, Antam and Inalum will together hold 51 per cent in the project while CHALCO will take 49 per cent. The project will be built in three years.
The smelter would have a capacity to produce 1 million tonne alumina a year starting 2018 and would supply to Inalum plant in North Sumatra.
“We will now form a team to conduct a feasibility study of the project. We expect the study to be completed in February and will begin construction in Q2,” said Johan.
According to him, the project is Indonesia’s first SGA smelter in Indonesia and has the potential to reduce the production cost of Inalum. Currently, Inalum imports raw material from Australia at $14 a tonne, which will come down to $1 per tonne.
Antam’s total bauxite ore reserve stood at 111.5 million metric tonne at the end of 2014.
Antam is planning a capital expenditure of Rp10 trillion ($735.29 million) in 2016 and is also looking at exploring new gold and copper mines.