Govt may transfer Inalum operation to Antam

The government may transfer the management and operation of the North Sumatra-based aluminum producer PT Indonesia Asahan Aluminium (Inalum) to state owned mining company PT Aneka Tambang (Antam) when the contract awarded to Japanese company Nippon Asahan Aluminium to operate the aluminium producer expires in 2013, Kontan reported on Wednesday.

Ansari Bukhari, the Director General of Metal, Machinery and Textile Industries at the Industry Ministry, said in Jakarta on Tuesday that negotiations on the transfer of the Inalum management and operation were currently underway involving the Indonesian and Japanese governmental officials and Antam executives.

?However, the Japanese government wants the contract to be extended,? he said.

The construction of the aluminum plant was part of the economic cooperation initiated by the Indonesian and Japanese governments in 1975. The plant began its operation in 1983 under a 30-year contract. Inalum, a consortium of nine Japanese companies, owns 60 percent stake in the plant, with the government holding remaining 40 percent.

According Ansari, the government preferred to terminate the contract and hand over the plant to Antam because the operation of the aluminum plant under the management of Inalum has been discouraging.

Besides, it is only able to produce 135,000 tons a year or about 60 percent of its installed capacity, its financial performance is also disappointing, he said. The fact that the company exports about 60 percent of its production is also another reason why the government plans to transfer its management and operation to Antam.

?It is not productive for the plant to export its production while at the same time Indonesia still imports,? Ansari said, adding that Indonesia?s aluminum import is almost as large as those exported by Inalum. (*)