Indonesia Asahan Aluminium named holding company for mining SOEs

The Ministry of State-Owned Enterprises has appointed PT Indonesia Asahan Aluminium (Inalum) as the holding company for state mining companies. This makes Inalum be in charge of PT Bukit Asam (Persero) Tbk (PTBA), PT Timah (Persero) Tbk (TINS), and PT Aneka Tambang (Persero) Tbk (ANTM).

Fajar Harry Sampurno, the SOE Ministry's deputy for Mining, Strategic Industry and Media Department, said Inalum was appointed because it is wholly owned by the government. This way, the state will have full control over its subsidiaries.

Despite the full-control status of the government, Harry ensured that the subsidiaries with a public company status will their status. "We promise that we will not interfere with investors," he said yesterday.

The discourse to form a mining holding emerged when the government was planning to buy the divested shares of PT Freeport Indonesia through SOEs. Harry said the ministry and the directors of the state companies continue to conduct reviews and studies, since this is the first time a non-public firm is appointed to be in charge of several public companies.

Now that a mining holding is established, the government's next target is to form a holding for toll road companies. This is in line with SOE Minister Rini Soemarno's plan to unify six sectors: mining, toll roads, PT Pertamina (Persero), housing, banking, and construction and engineering.

"The four other sectors will likely be discussed next year," he said. Harry added, the formation of holdings is aimed at reducing SOEs' dependence on the State Budget. Consolidation is expected to strengthen SOEs' funding abilities.

Inalum president director Winardi Sunoto said that being declared as a mining holding will allow his company to lower aluminium production costs. Now that it is a parent company of several miners, Inalum no longer needs to import raw materials. Antam has a bauxite refining project in Mempawah, West Kalimantan that Inalum can process into grade alumina.