Friday, April 19, 2024

Inalum and EGA to develop bauxite smelter in North Sumatra

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Indonesia state mining holding company MIND ID through its subsidiary Inalum plans to collaborate with United Arab Emirates aluminium company, the Emirates Global Aluminium (EGA), to develop the bauxite downstream industry in order to produce aluminum.

Energy and Mineral Resource Ministry Arifin Tasrif said the bauxite smelter with the capacity of 1 million per year will cost between US$ 2 billion to US$ 3 billion in investment. “We encourage the company to operate and absorb the bauxites,” Arifin said on Friday, February 16, 2024.

The smelter will be built in the location of Inalum’s operation in Asahan, North Sumatra. The smelter will use clean energy from hydro power plant.

Progress of bauxite smelter industry

Arifin said the development of the Inalum-EGA’s buxite smelter will be a sigfnificant progress for bauxite smelter industry. The ministry is encouraging other private bauxite smelter companies to joint force in consortium to develop bauxite smelters. “This train is looking for big investors, BHP and EGA also want to enter. If you are alone you cannot do it,” he added.

So far, the Energy and Mineral Resources Ministry only received report and pictures of the bauxite smelters progress. However, when the officer from the ministry visit the construction site, there is no progress at all.

As previously reported, Acting Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Bambang Suswantono addmitted that there are problems in the construction of bauxite smelters, including obstacles in finding investor for funding and the process of restoring Mining Business Permit.

As previously reported, the development of the Indonesia bauxite downstream industry has been less encouraging with only four companies having the capacity to process bauxite into alumina.

Irwandy Arif, Energy and Mineral Resources Ministry’s special staffer for the acceleration of mineral and coal management, says there are eight companies that have promised to the government to establish bauxite refineries.

However, there has been no significant progress in their development of the refineries. “They are very slow,” Irwandy said.

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