Inalum plans to invest in N. Kalimantan

State-owned aluminum producer PT Indonesia Asahan Aluminium (Inalum) plans to develop alumina downstream industry in North Kalimantan to take advantage of electricity potential in the province.

North Kalimantan Governor Irianto Lambrie said in a statement that Inalum signed on Tuesday a MoU with the provincial government on the investment plan. He expected the company to quickly realize the investment plan.

He did not say the specific downstream industry to be developed by Inalum. But he said that Inalum was interested in developing alumina downstream in the province because of huge electricity potential in the region. He pointed out that the province has a potential to produce up to 20,000 MW of hydro electricity from local rivers. He added that a giant hydro power plant project (called Sungai Kayan PLTA) with capacity of 9,000 MW is currently under construction process by PT Kayan Hydro Energy, funded by Chinese investors. The construction started in 2014.

He said that the electricity from the Sungai Kayan PLTA will be sufficient to support Inalum?s plan to develop alumina downstream industry in the province.

Inalum is teaming up with IDX-listed mining firm PT Aneka Tambang Tbk (Antam) and Chinalco to build a 2-million-ton per annum smelter-grade alumina plant in West Kalimantan, which will process bauxite ores into alumina, a raw material for aluminum production. Inalum, which is based in North Sumatra, plans to double production capacity to 500,000 tons in 2021, and to further expand the capacity to 1 million tons in 2025 to meet growing domestic demand. Inalum has relied on imported alumina to produce aluminum ingots. Last year, Inalum started diversifying downstream to produce aluminum alloy and billets.

Editing by Reiner Simanjuntak