Home / Metal News / Aluminium / Japan Offers to Invest in Indonesia Aluminium Smelter
Japan Offers to Invest in Indonesia Aluminium Smelter
Jul 29,2010 10:17CST
industry news

JAKARTA, July 29 -- A consortium of Japanese investors has offered to invest $367 million to expand an aluminium smelter in Indonesia, an effort to maintain their majority ownership as Indonesia wants to increase its stake.

The government will soon kick off negotiations with Nippon Asahan Aluminium, a consortium of 12 Japanese firms, over the fate of an aluminium smelter in Sumatra island after a 30-year ownership contract expires in 2013.

Nippon Asahan currently holds 58.8 percent of PT Inalum, which operates the smelter, while the Indonesian state owns the rest. Indonesia said last month it was considering taking over Inalum or increasing its stake so output could be sold to the domestic market.

The Japanese firms' offer would expand the smelter's capacity to 317,000 tonnes per year from 250,000 tonnes currently, said Effendi Sirait, chairman of the Asahan Authority Board, which manages the smelter and an associated hydropower plant.

"Indonesia's aluminium consumption is growing so the capacity should be expanded. That's the offer from the Japanese," Sirait told reporters on Wednesday.

The government has not yet made a decision, Sirait said. Inalum sells about 60 percent of its aluminium output to Japan while selling the remainder to the local market. The firm produced 255,996 tonnes of aluminium ingots in the fiscal year of April 2009-March 2010.

Indonesia is keen to increase revenue from the mining sector after metals prices soared in 2008, including by pushing for more metal processing at home as stated in a mining and coal law that took effect in 2009.

Prices of aluminium -- used in transport and packaging -- hit a two-month high of $2,085 per tonne on Wednesday, but have fallen more than 6 percent so far this year.


Aluminum Al

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn