Cita Mineral Investindo Tbk guarantees $250 million for developing the aluminium smelter with Adaro

The Indonesian company engaged in the activity of bauxite mining PT Cita Mineral Investindo Tbk. (CITA) delivered guarantees to associated companies PT Kalimantan Aluminum Industry (KAI) and PT Kaltara Power Indonesia (KPI) worth US$249.5 million (IDR 3.8 trillion).

In the information disclosure on the Indonesia Stock Exchange (IDX), CITA's management said, "CITA would seek approval from the shareholders at the Extraordinary General Meeting (EGM) in connection with the plan for a guarantee transaction from CITA in the form of a corporate guarantee that KAI and KPI will receive. The guaranteed value is estimated at around US$249.5 million (Rp.3.8 trillion)

This guarantee is based on CITA's proportionate shareholding in KAI and KPI for the loan facility that KAI and KPI will receive, with a maximum amount of US$1.1 billion and US$700 million, respectively.

Loan repayments should be made within 8 to 10 years of signing the loan facility agreement, with at least a two- to the three-year grace period.

This guarantee was provided by CITA to the Adaro Group in order to carry out the construction of the aluminium smelter. A significant amount of funds and special technology is required to build this aluminium smelter, according to the company's management.

 An aluminium smelter with a production capacity of up to 2 million tonnes per annum will be established and built by CITA in collaboration with shareholder KAI and KPI.