ANTAM and INALUM forms a JV to develop smelter grade alumina refinery

PT ANTAM Tbk and PT Indonesia Asahan Aluminium (INALUM) announced that they have agreed to set up a joint venture company to develop and operate Smelter Grade Alumina Refinery (SGAR). Construction of the SGAR in its proposed location in West Kalimanta, is to start in 2016; operations at the plant will commence in 2019.

ANTAM's President Director, Tedy Badrujaman, said, 'The agreement with INALUM to set up a joint venture company with strategic partner is the next step following the signing of MoU between the two companies in July this year. The development of SGAR Mempawah will add value to our vast bauxite reserves through downstream processing.'

INALUM's President Director, Winardi Sunoto, said, 'Our synergy with ANTAM is part of our sustainable development initiatives to create an integrated downstream aluminium industry in Indonesia. The initiative also aims to enhance corporate added value and competitiveness.'

ANTAM and INALUM will sign a shareholder agreement which will be followed with the establishment of a joint venture with a strategic partner. Both the companies are currently reviewing potential strategic partner. The candidates of potential partner are leading international companies with experiences in aluminium and alumina processing industry including, amongst others, candidates from China, Russia and United Arab Emirates.

The production capacity of SGAR is estimated at 2 million tons of SGA per year which will be developed in stages and will require bauxite ore feed of 6 million wet metric tons (wmt) per year. The capacity of the first stage of the SGAR is estimated at 1 million tons of SGA per year. ANTAM expects to process its vast bauxite reserves whilst INALUM expects to acquire alumina feed for aluminium processing from a domestic source, translating into lower dependency of alumina imports through the development of SGAR.

INALUM currently has an aluminium smelting capacity of 250,000 tons of aluminium ingots per year requiring a minimum of 500,000 tons of alumina feed per year. INALUM plans to increase its capacity to 500,000 tons of aluminium per year requiring 1 million tons of alumina feed per year in 2020. As part of its downstream strategy, in 2016 INALUM plans to produce the new products of aluminium billets and aluminium alloys, besides the existing aluminium ingot product.