Antam, Inalum forge alliance

By Ruli Setiawan

IDX-listed mining firm PT Antam Tbk announced on Thursday an agreement with state-owned aluminum producer PT Indonesia Asahan Aluminium (Persero) (Inlum) to form a joint venture together with strategic partners to operate and develop a smelter-grade alumina refinery (SGAR) in Mempawah Regecy, West Kalimantan Province.

The firm said in a statement that the SGAR, which is estimated to cost US$1.7 billion, is scheduled to start construction in 2016 and is expected to be completed in 2019.

Antam?s President Director Tedy Badrujman said the agreement came as a follow-up to the memorandum of understanding signed by both firms in the past July. ?The development of SGAR Mempawah will greatly increase the value of Antam?s bauxite deposit,? he said.

Inalum?s President Director Winardi Sunoto said: ?The synergy with Antam is aimed to drive a sustainable growth of downstream aluminum industry in Indonesia in order to increase added value and competitiveness.?

To follow up the agreement, both firms will sign a shareholder agreement together with strategic partners, which both firms are selecting from among leading international firms from China, Russia and United Arab Emirate (UAE).

The SGAR is planned to have a capacity of 2 million tons per annum (mtpa) of smelter-grade alumina. The construction will be carried out in phases with the first phase aimed to develop a 1 mtpa capacity which will need 6 million wmt of bauxite per year. Thanks to the SGAR, Antam will be able to process its bauxite deposit into alumina and send it to Inalum. As such, Inalum will be able to reduce its alumina imports.

Inalum, which has a production capacity of 250,000 mtpa of aluminum ingot, needs 50,000 mtpa of alumina as raw material. The firm plans to increase its production capacity in phases to 500,000 mtpa in 2020. It will thus need 1 mtpa of alumina.

Starting end-2016, Inalum will put out new products, namely aluminum billet, aluminum alloys and aluminum ingot .

Editing by Johannes Simbolon