Indonesian Inalum smelter might cutback production diverting power to main grid

Indonesia’s only aluminium smelter, PT Inalum is planning to cut back their production to 202,000 tons whereas they have a capacity of 250,000 tons because they need to divert some of their power for public use.

An official from the firm who did not wish to be named said that nearly 210 megawatts of power would be given to PLN from April this year reflecting the woeful infrastructural condition faced by South East Asia’s biggest economy.

Energy will be transferred from the Asahan 2 hydro power plant, from where Inalum gets the power to product ingots, to the North Sumatra grid.

Sofyan Basir, the CEO of the state-owned Perusahaan Listrik Negara (PLN) electrical utility, said that the energy diversion from Inalum smelter is supposedly for “only 6 months”, until the proposed power plant projects in the region come online.

The country’s power problems primarily arise from the slow development of power generation projects like the proposed hydro electric plant due to be erected on the same river.

The company is also suffering due to the influx of cheap Chinese imports diminishing the demand for the domestic metal. Chinese aluminium products exports have grown about 19 percent last year.