JV agreement for W. Kalimantan SGA plant expected by year-end

By Thomas Sembiring

Feasibility study for a planned smelter grade alumina (SGA) plant in Mempawah, West Kalimantan, is currently being finalized, according to an official.

President Director of IDX-listed aluminum producer PT Indonesia Asahan Aluminium Tbk (Inalum) Winardi sad on Monday that once completed, it will be followed with the signing of a joint venture agreement, expected at the end of this year.

?The FS will probably be completed soon. We hope the JV agreement can be signed by year-end, and start preparations for construction,? he told petromindo.com.

Inalum, IDX-listed mining firm PT Aneka Tambang Tbk (Antam), and China Aluminum Company (Chinalco) signed a MoU late in 2015 to build the SGA plant, which is planned to have a production capacity of 2 million tons per year, of which the first phase will have a capacity of 1 million tons per year, requiring bauxite ores supply of 6 million tons per year.

One of the crucial issues that must be settled by the three companies is division of shares in the estimated US$1.5 billion-$1.8 billion project.

Winardi said that the signing of the JV agreement will include the division of the shares in the SGA plant. He acknowledged that Inalum and Antam want to have a combined stake of at least 51 percent. He added that Inalum and Antam have yet to agree on how many shares each will have in the project.

Editing by Reiner Simanjuntak