Russian-based Vi Holding to invest $500 million in Indonesian refinery

Russian Trade Minister, Denis Manturov, reported to Reuters on Tuesday that the Russian-based industrial group named Vi Holding will be investing $500 million in an alumina refinery in Indonesia, which can be built in the next three to four years.

The highly debated mineral export ban in Indonesia has created a desperate need in the country to move up the value chain to start processing the bauxite. This ban has also made aluminium more stable in the market as the shortage of bauxite supply has contributed to the stronger aluminium prices.

After meeting Joko Widodo, the new Indonesian president in Jakarta, Manturov states that the new refinery will use Russian technology and is expected to have an output of 1 million tonnes per year which will then be shipped to China for further processing.

The company will be shipping the alumina to their China industry where they will be investing $3 billion to process the alumina to obtain the aluminium metal.

According to the Indonesian trade ministry, Russia is the 14th ranking company among Indonesian’s top importers. Between January and July this year there has been total trade of $1.3 billion between the two countries.