State-run aluminum maker Indonesia Asahan Aluminium, or Inalum, is planning to build an aluminum smelter valued at $2 billion and a calcined petroleum coke plant worth $30 million, in a move that will help it to produced value-added products.
The smelter will turn bauxite into aluminum, which the company needs to produce aluminum ingots. The move is expected to bring added value to the company, which is now under the state’s control. The government took over Inalum after buying shares it didn’t own from its Japanese partner last year. Inalum is also planning to diversify its business by producing aluminum alloy.
“We’re conducting a feasibility study on the projects. Hopefully it can be completed soon so that the two plants can start operation by 2019-2020,” Agus Tjahajana, chief commissioner of Inalum, said on Tuesday.
Agus said the company gets its raw materials for calcined petroleum coke from Dumai and bauxite from state-run miner Aneka Tambang. Inalum’s need for aluminum reaches 500,000 metric tons per year and growing demand suggests the need for a smelter.
“Around 80 to 90 percent of Inalum’s production is sold domestically. We only export it through tender if the supplies are unabsorbed here,” said Agus. “We’re still reviewing all possibilities, including the investment funding.”
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