The Ministry of Energy and Mineral Resources (ESDM), Indonesia, solicited PT Indonesia Asahan Aluminum (Persero) or Inalum operating to expedite the accomplishment of development projects and increase the capacity of the aluminium smelter and alumina refinery.
However, this is in line with the issuance of a government regulation (PP) regarding the uncoupling of business operations or the split-off of the state-owned mining company and BUMN Mining Industry Holding Indonesia (MIND ID).
Agus Tjahajana, the special staff to the Minister of Energy and Mineral Resources for the Acceleration of Industrial Development of the Energy and Mineral Resources Sector, said, "The split-off is expected to make Inalum Operating more serious in accelerating processing and production capacity increases to aluminium levels to reduce the current relatively high import burden."
"Hopefully, Inalum's upstream projects to process bauxite will be completed soon. We will not import alumina, but we can also export it because we have adequate bauxite reserves," Agus added.
Agus specifically requested the board of directors of Inalum to immediately accomplish the Smelter Grade Alumina Refinery (SGAR) project in Mempawah, West Kalimantan.
The alumina refinery project, which was recently withdrawn from the national strategic program (PSN), is considered to have witnessed a potential revenue loss of US $450 million.
The reason is that the project undertaken by Inalum operates together with PT Aneka Tambang Tbk. (ANTAM) did not show any significant development during the last 16 months. As is known, the construction of a new smelter reached 14 per cent of the target set at 70 per cent at the beginning of this year.
"Inalum was asked to finish its smelter project in West Kalimantan as soon as possible because it hasn't been completed for too long," Agus said.
On the production side, he continued by saying the Indonesian government anticipates that Inalum can increase the installed capacity of aluminium production to reduce dependence on imports of domestic industrial raw materials.
"The capacity, only 250,000 tonnes per year, can be doubled immediately. Inalum has been around for almost 50 years, the capacity is still the same, while Press Metal Malaysia, which has only been around for less than ten years, has tripled," he said.
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