Inalum seeks funding for aluminium smelter and power plant

State-controlled aluminum maker Indonesia Asahan Alumunium (Inalum), is seeking $1.33 billion to help finance the construction of a smelter, power plant and expansion of its port, its chief said.

Winardi, the president director of Inalum, said the source of financing would come from bank loans, internal cash or through a potential initial public offering.

He said the company, which is based in Kuala Tanjung, North Sumatra, needs to spend $1.9 billion on various investments. “Around 30 to 35 percent will use internal cash, while the remainder will come from external funding,” Winardi said.

He said Inalum plans to build a smelter that will process bauxite ore into aluminum, and that next year the company hoped to appoint a contractor to begin construction of the plant.

Right now, Inalum has one aluminum smelter that produces aluminum ingots with a capacity of 250,000 tons per year.

Inalum plans to build a 600-megawatt hydro power plant. Inalum have invested $750 million in the plant, expected to start construction next year.

Inalum hope to use the plant to boost production of aluminum ingots to 500,000 tons per year by 2019, with help from the additional smelter.

Inalum already has a hydro power plant with a peak capacity of 513 MW to support its existing plant.

Winardi said the company is hoping to hold an IPO in 2016, but it will need shareholders’ approval.

The Indonesian government took control at Inalum last year from a Japanese consortium after its contract expired.