Showa Denko quits joint venture company PT Indonesia Chemical Alumina with Antam

The partnership of Indonesia’s diversified mining company PT Aneka Tambang (Antam) and Japanese Showa Denko K.K. has come to a breaking point as the latter wants to quit the joint venture company, PT Indonesia Chemical Alumina, while Antam wants to divest some of its shares.

The joint venture company owned a chemical grade alumina (CGA) plant in Sanggau, West Kalimantan that has been in operation since 2014. Total investment for the plant, according to the Investment Coordinating Board (BKPM), reached US$352.2 million.

Antam owned 80% of PT Indonesia Chemical Alumina shares while the rest was owned by Showa Denko. Earlier also Antam offered to divest some of the shares to Showa Denko that could not be materialized.

In July, Showa Denko K.K announced its willingness to quit the joint venture and had written a 10 billion yen (US$90.3 million) loss in investment. However, none of the companies divulged any details of the problem they faced while running the joint venture.

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"After some of terms and conditions were not met, Showa Denko decided to quit, but it had to follow the process. There must be replacement in the joint venture," Antam Finance Director Dimas Wikan Pramudhito explained at Indonesia Stock Exchange (IDX) on Monday. 

Since, the joint venture is now broken, both Antam and Showa Denko have to find themselves a third party buyer to take over Showa Denko’s shares and buy some shares owned by Antam.