Antam to provide alumina supply to Inalum

State mining company PT Aneka Tambang (Antam) will begin this year the construction of a smelter grade alumina (SGA) plant in West Kalimantan, with an annual production capacity of 1.2 million tons, Kontan business daily reported on Wednesday.

About 500,000 tons of the total production will be supplied to aluminum producer PT Indonesia Asahan Aluminium (Inalum) in North Sumatra, and the other 700,000 tons will be exported to Asia and Europe, Antam?s head of investor relations, Eko Bayu Endriawan, said in Jakarta on Tuesday.

?Antam does not have any plan yet to take over Inalum. We will only act as supplier,? he said.

Antam plans to build two bauxite processing plants to produce smelter grade alumina (SGA) and chemical grade alumina (CGA). For the construction of the SGA smelter, Antam will invest about US$1 billion, while for the CGA plant, the company will spend up to $400 million. The two plants will be located in West Kalimantan.

Antam will cooperate with Chinese company Hangzhou Jinjing Group to build the SGA plant. The two companies will set up a joint venture to operate the plant, with Antam holding a 49 percent stake and Hangzhou holding the other 51 percent. Antam has an option to increase its shares to 51 percent after three years of the operation.

The construction of the CGA plant is currently under feasibility study. (*)