Govt plans to nationalize Inalum in 2013
Wednesday, December 26 2007 - 02:31 AM WIB
Minister for Supervision of State Owned Enterprises Sofyan Djalil said in Jakarta Tuesday that in line with the plan, the government would propose changes in some clauses in the agreement on the operation of the company during the incoming shareholders meeting.
?The government plans to take over the company with 100 percent ownership. After that, Inalum will be incorporated into a mining holding company,? he said, while refusing to provide details on the takeover mechanism, including the source of funds for the takeover.
Inalum is a joint venture between the Indonesian government ((41.13 percent) and Japanese consortium Nippon Asahan Aluminum Co. Ltd (58.87 percent). The consortium comprises Japanese industrial giants such as Mitsubishi, Marubeni and Sumitomo. The firm operates an aluminium plant in Kuala Tanjung, North Sumatra using power from the Asahan hydropower plant.
The firm has suffered losses for many years. In 2006, the firm booked US$100 million in profit but it spent all the profit to repay debt.
According to Sofyan, the firm's financial statement is expected to turn positive starting in 2010 following the repayment of all debts.
Meanwhile, Deputy Minister of State Enterprises for Mining, Strategic Industries and Telecommunications Roes Aryawijaya said the government believed it would be still able to operate the firm for another 20 years. Tax revenue from the firm is expected to increase as aluminium prices tend to inrease and the firm's costs are declining, he said.
The firm was established as part of the economic cooperation initiated by the Indonesian and Japanese governments in 1975. The company began its operation in 1983 under a 30-year contract. (*)