Indonesia’s state-owned mining holding company, MIND ID, plans to increase the capacity of its smelter grade alumina refinery (SGAR) located in Mempawah, West Kalimantan.
The SGAR project is targeted to ramp up production in the first quarter of 2025 and will initially produce one million tons of alumina per year. That volume comes from processing 3.3 million tons of bauxite.
“It will increase the smelter capacity and significantly increase the aluminum processing capacity. Maybe three times the current size in Kuala Tanjung,” Hendi Prio Santoso, MIND ID President Director, said on Thursday, January 9, 2025.
The Kuala Tanjung smelter in North Sumatra is planned to have a production capacity of 600 thousand tons of aluminum per year.
Expansion and forex saving
Then President Joko “Jokowi” Widodo inaugurated on September 24, 2024 the first bauxite injection into a smelter owned by PT Borneo Alumina Indonesia (BAI) worth Rp16 trillion (US$990 million).
BAI is a joint venture subsidiary of PT Indonesia Asahan Aluminium (INALUM) and PT Aneka Tambang (ANTAM), both of which are also members of MIND ID.
“That might save US$300 million. Hopefully this March we can produce our own alumina,” Minister of State-owned Enterprises (SOEs), Erick Thohir, said as quoted on CNBC TV, on Thursday, January 9, 2025.
Meanwhile, MIND ID has also prepared 500 hectares (ha) of land for the US$2 billion expansion of the SGAR Mempawah bauxite smelter phase II with a production capacity of 600,000 tons per year, plus financing for supporting facilities of US$900 million for road infrastructure, hauling, and power plants.
According to Hendi, the planning of the Mempawah smelter expansion project phase II can save the country’s foreign exchange of up to US$3.5 billion per year from reducing aluminum imports.
“Then there is the creation of output from the economic side, around Rp150 trillion,” he said.
