Inalum targets 2029 to commission new aluminum plant

State aluminum company PT Indonesia Asahan Aluminium (Inalum) will aim for 2029 to commission the new aluminum plant it plans to build in West Kalimantan, its chief executive said on Thursday.

The company plans to build a smelter capable of producing 600,000 metric tons of aluminum a year with an estimated investment of nearly $2.5 billion, chief executive Melati Sarnita told members of parliament.

The new plant will add to the company’s current production capacity of around 275,000 tons.

The additional capacity is designed to reduce Indonesia’s dependence on imports, she said, noting that the country currently sources around 54% of its aluminum from abroad.

“Looking ahead, we believe that we can increase our capacity to reduce reliance on imports and strengthen the national aluminum supply chain,” she told parliamentarians.

The company is in talks with potential strategic partners for the aluminum plant, including sovereign wealth fund Danantara and other global companies, Melati said.

A Chinese company providing the smelting technology is also expected to take a stake of around 5% to 10% in the project, she said. She did not give the name of the company.

The project will require 1.2 gigawatts of power capacity, and is planning to purchase the electricity from the state utility firm or other suppliers.

The company is also expanding the capacity of its refinery to double its output of smelter-grade alumina, the raw material for aluminum, raising production to 2 million tons by 2028 from 1 million tons now.

(By Fransiska Nangoy; Editing by David Stanway)