Indonesia's state-owned mining holding company, MIND ID, is looking to ramp up its aluminium ambitions with a multi-stage, vertically integrated plan to transform the country into a centre for global aluminium production. MIND ID, through its subsidiary PT Indonesia Asahan Aluminium (Inalum), is set to increase national aluminium production capacity from 275,000 tonnes per annum to 900,000 tonnes per annum by 2029.
Bridging the aluminium demand-supply gap
According to Maroef Sjamsoeddin, President Director of MIND ID, the expansion is critical to narrow down Indonesia’s aluminium supply gap, which currently hovers around 1.2 million tonnes per year. “Domic aluminium consumption is expected to increase by around 600 per cent in the next 30 years, especially to support the electric vehicle (EV) and battery ecosystem," he said in a statement on Sunday, July 27.
The future of green industries ranging from solar photovoltaics (PV) to EV batteries is aluminium-intensive. Maroef pointed out that 21 tonnes of the commodity are used in each 1 MW PV solar system and that battery packs contain as much as 18 per cent by material weight. He pointed to these data as an example of MIND ID production ramping up for the urgency in greater aluminium capacity.
SGAR: The linchpin of Indonesia’s aluminium transformation
One element of this expansion is the Smelter Grade Alumina Refinery (SGAR) in Mempawah, West Kalimantan. The SGAR is a co-investment development between PT Aneka Tambang (Antam) and Inalum and is expected to commence bauxite refining in the fourth quarter of 2024. Commercial production is expected to start in February 2025.
As Melati Sarnita, Director of Business Development at Inalum, affirmed, “We want to start the bauxite injection process according to plan. President Jokowi has expressed his enthusiasm and support for this initiative.” She also added that President Joko Widodo (former president of Indonesia) will visit the project site during the commissioning phase in September 2024, which coincides with the SGAR nearing 97 per cent completion.
Also read: PT Aneka Tambang (Antam) commits $723 million for mining expansion, aims for long-term growth
Securing the supply chain: Bauxite to aluminium
The SGAR Phase I will process 1 million tonnes of alumina a year, with 3.3 million tonnes of bauxite processing capacity. Phase II, which is underway, will add 1 million tonnes of alumina. A new aluminium smelter is also being constructed in Mempawah to add 600,000 tonnes per annum, providing an end-to-end production loop from bauxite extraction to aluminium ingots.
MIND ID will also construct a bauxite repository via Antam of 1.47 million tonnes in the vicinity, providing additional raw material security.
A strategic shift to self-sufficiency
Maroef emphasised the broader national significance, "The MIND ID Group is committed to driving integrated aluminium downstream to strengthen Indonesia's position as a world aluminium producer and is able to be sovereign in supporting the manufacturing industry as well as reducing import dependence.”
With USD 1.7 billion (Rp 27 trillion) being invested into the SGAR project and a supportive governmental policy, including the 2023 bauxite export ban, Indonesia is ready to take back control of its mineral wealth.
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