President Joko “Jokowi” Widodo inaugurated the first delivery of ammonium nitrate produced by State-owned PT Kaltim Amonium Nitrat (KAN) in a ceremony held at the Bontang Industrial Estate Zone (KIE) in East Kalimantan on Thursday, February 29, 2024. The company, which is a joint venture between PT Pupuk Kaltim (a subsidiary of PT Pupuk Indonesia) and PT Dahana Investama Corp. (a subsidiary of PT Dahana) has a production capacity of 75,000 metric tons of ammonium nitrate per year with an investment of Rp 1,2 trillion (US$76.3 million).

Ammonium nitrate, the primary raw material required for explosives production, particularly in commercial sectors such as mining, oil, and gas, construction, and quarries, will be supplied by PT Pupuk Kaltim, while explosive materials will be provided by PT Dahana to several customers.

The initial delivery consisted of five trucks destined for mining customers in East Kalimantan. Rahmad Pribadi, the CEO of PT Pupuk Indonesia, mentioned that ammonium nitrate also serves as a raw material for nitrate-based NPK fertilizers. However, production of such fertilizers is currently pending due to ongoing construction of manufacturing facilities.

Despite the inherent risks associated with explosive materials, the KAN factory boasts high security standards with licensed operations complying with Sedin-Hailifeng technology and trained human resources. With its current production capacity, PT KAN aims to reduce ammonium nitrate import dependency by 8 percent, down from the previous 21 percent, resulting in an estimated annual foreign exchange savings of US$49.1 million at a price assumption of US$700 per ton.

Meanwhile, PT Dahana's CEO, Wildan Widarman, announced plans to promptly deliver ammonium nitrate orders for coal mining explosives in East Kalimantan. However, he refrained from disclosing specific shipment volumes and locations due to stringent regulatory licensing for explosive materials.

He cited the company's market share in covering various sectors, including coal and gold mining, construction for tunnels, highways, and more. Initially focusing on supplying ammonium nitrate to East Kalimantan mining companies, PT Dahana envisions potential market expansion to Java and Sumatra due to extensive distribution networks in the future.