Cita Mineral to produce Indonesia’s first alumina

Indonesian conglomerate Harita Group representative Hidayat Sugiarto (left to right), bauxite miner Cita Mineral Investindo director Robby Irvan, president director Liem Hok Seng, director Yusak Parded, commissioner Harry Tanoto and commissioner Kartiko Sunu prepare for a photograph during a public expose following Cita Mineral Investindo’s annual shareholders meeting in Jakarta on Thursday, June 16.

Bauxite mining company Cita Mineral Investindo will become the country’s first alumina producer following the completion of its new smelter.

The publicly listed firm, part of natural resources conglomerate Harita Group, will begin the production of smelter grade alumina (SGA) at its smelter in Ketapang, West Kalimantan, within days.

CITA president director Liem Hok Seng claimed that Indonesia would be on par with its counterparts in that field, namely China, Russia, Australia and the US, thanks to the first SGA-type alumina production.

“This move certainly creates added value to locally-mined bauxite, which in the past had to be processed overseas into SGA-type alumina and then exported again to Indonesia to create aluminium,” he said on Thursday.

The US$1.15 billion-smelter is built by Well Harvest Winning Alumina Refinery (WHW). WHW is a joint venture between CITA, the world’s largest aluminium producer China Hongqiao Group Ltd. and its subsidiary Shandong Weiqiao Aluminium and Electricity Co. Ltd. and energy consultancy firm Winning Investment (HK) Company Ltd.

CITA and China Hongqiao control 30 percent and 56 percent, respectively, of the shares in WHW. Winning Investment holds 9 percent, while Shandong Weiqiao owns the remaining 5 percent.

CITA has majority stakes in Harita Prima Abadi Mineral and Karya Utama Tambangjaya, two bauxite miners that will supply main raw materials to its smelter to produce the SGA alumina.

In the first phase, the smelter will produce one million tons of alumina per year with CITA’s own coal-fired power plant supplying 80 megawatts (MW) of electricity for the production.

CITA will also complement the smelter with ports, boarding houses and other infrastructure to accommodate at least 2,500 workers for the facility. WHW aims to being exports of the product in July.

CITA commissioner Harry K. Tanoto said the company was currently in the process of expanding the new smelter in a second phase of the project. The expansion is expected to conclude in 2018.

The company is seeking additional bank loans to partially finance the $350 million expansion. Harry said eight lenders, local and foreign, had expressed interest in financing the project.

The rest of the funds will come from internal funds. By 2018, the smelter will have a production capacity of two million tons of alumina. Electricity supply to the smelter will increase as well to a total of 160 MW.

With that capacity, CITA will be able to supply alumina to state-owned aluminum-maker Inalum, which currently imports alumina, mostly from Australia, the biggest bauxite producer in the world.