Inalum to become 100% state-owned company in November

Indonesian Industry Minister M.S. Hidayat on Monday said the government will fully take over resource company Indonesia Asahan Aluminium, known as Inalum, in November, although negotiations are still ongoing.

“It should become 100 percent Indonesian-owned by November 1, though technicalities are still being discussed,” Hidayat told journalists at the State Palace.

Hidayat said that the government has already earmarked Rp 7 trillion ($707 million) for the take-over.

The government had earlier planned to sell its stakes to other investors, but then changed course because it wants to turn Inalum into a new state-owned enterprise.

Inalum is currently 58.88 percent controlled by Japanese consortium Nippon Asahan Aluminium and 41.12 percent controlled by the Indonesian government.

While the government previously planned to purchase the Japanese stake through state investment firm Government Investment Center (PIP), the move was originally rejected by lawmakers before they agreed that the government could fund the purchase using Rp 2 trillion from the 2012 state budget and Rp 5 trillion from the 2013 state budget.

Inalum produces 230,000 tons of aluminum a year, with 40 percent of the output sold on the domestic market and 60 percent on the Japanese market.

The government has insisted on taking over Inalum, citing potentially larger state revenue from aluminum sales.