Inalum budgets a CAPEX of $ 318 million for 2021; eyes to sell aluminium in domestic market

The Indonesian state-owned company specialized in aluminium smelting, PT Indonesia Asahan Aluminium, colloquially known as Inalum has budgeted a capital expenditure of $ 318 million for 2021. The investment will be major to finance several downstream projects and increase aluminium production capacity.

Oggy Achmad Kosasih, Managing Director, PT Inalum (Persero) accented: “The CAPEX of $ 318 million was used for Inalum as operating capital, not on a consolidated holding basis (MIND ID). This year's Capex is also a continuation of the CAPEX that was not absorbed last year.”

"In 2020 several work contracts that have been agreed upon cannot be executed due to limitations in entry and exit between regions and between countries due to the Covid-19 pandemic. So that the realization of the CAPEX is not too big, and carried forward to 2021," said Oggy.

Meanwhile, the funds will be used for various projects such as the Smelter Grade Alumina Refinery (SGAR) in Mempawah, West Kalimantan, and smelter expansion and furnace modernization (upgrading pot) at an aluminium smelting facility in North Sumatra.

"Following the mandate of shareholders to carry out downstream, Inalum has several large projects for integration from upstream to downstream," said Oggy.

In addition to the SGAR project and upgrading pot & revamping, this year Inalum is also working on the Calcined Petroleum Coke (CPC) project, increasing the capacity of a Hydro Power Plant (PLTA), integrating bauxite mines, and recycling of aluminium.

The SGAR project which is being carried out with PT Aneka Tambang Tbk (Antam) is currently entering the construction phase. Until January 2021, the progress has been recorded at 14%. The alumina smelter project is targeted to achieve 70% progress this year.

"However, it also depends on the current situation and conditions, especially related to the pandemic. Hopefully, there are no significant obstacles, I am optimistic that the project can run according to target," said Oggy.

The smelter project, which has an investment value of US $ 841 million, is targeted to be completed in the third quarter of 2023.

In 2021, Inalum will increase the portion of aluminium sales to the domestic market, as it targets supply to the domestic market to reach 80% of total sales.

Oggy Achmad Kosasih, said: “This state-owned company is prioritizing meeting domestic demand for aluminium to support the growth and competitiveness of local industries. Last year, Inalum's domestic sales of aluminium were recorded at 75%, while 25% of Inalum's products were exported.”