President Joko Widodo’s Visit to SGAR Project Evidence of Bauxite-Aluminium Downstreaming Commitment

Mempawah, 20 March 2024 – PT Mining Industri Indonesia (Persero) or MIND ID is consistent in implementing its downstreaming program by continuously spurring the construction of smelters, processing commodities from raw materials to become half finished as well as finished products. It is hoped that this step will be able to increase state income through added value from mining product processing.

MIND ID has completed Phase 1 of the Smelter Grade Alumina Refinery (SGAR) in Mempawah Regency, West Kalimantan.

President Joko Widodo and MIND ID President Director Hendi Prio Santoso visited the completion of the National Strategic Project of PT Indonesia Asahan Alumiun (INALUM) and PT Aneka Tambang Tbk through its subsidiary, PT Borneo Alumina Indonesia (BAI), Wednesday (20/3/2023).

Hendi expressed his utmost appreciation for the presence of the President in Mempawah to visit the SGAR project. He further explained that the project is a manifestation of the President’s vision in connection with the downstreaming of bauxite which is integrated from upstream to the aluminium industrialization phase.

The President appreciates MIND ID Group’s proactive completion of the alumina smelter in West Kalimantan. He believes that this rapid step can become an example for many mining companies in creating added value for raw commodities through half-finished or finished product processing.

“I have frequently expressed this in connection with downstreaming. After nickel, several mining commodities have also done this, then we get to bauxite. Bauxite ore is plentiful in West Kalimantan,” said the President.

The President said that National Strategic Project (PSN) development is very crucial as alumina demands are very high, and presently, many of such demands are relying on imported products.

“Half of the demands for alumina are still imported. If the SGAR smelter is completed, it will be brought to Kuala Tanjung, and then processed into aluminium, we no longer have to import. That’s the target,” he said.

Hendri also said that MIND ID continues to implement the tasks and mandates from the government to synergize the processing of mineral natural resources for civilization, prosperity, and a brighter future. The implication of this alumina smelter is that up to 1,000 workers will be employed.

“With the completion of Phase 1 SGAR in Mempawah Regency, Indonesia’s position in the global supply chain will become more solid, enabling Indonesia to become the motor of future global economic growth,” he said.

Phase 1 SGAR Mempawah is part of INALUM’s corporate action in creating an aluminium industry ecosystem that is integrated from upstream (bauxite ore) to downstream.

The SGAR Mempawah project connects the supply chain of bauxite minerals in West Kalimantan to the aluminium smelting plant. The investment value of this National Strategic Project reached US$900.7 million or about Rp13.5 trillion.

The Phase 1 SGAR project is targeted for production in the third quarter of 2024 and operating at full capacity at the beginning of 2025. Later on, the smelter produces about 1 million tons of alumina per year with 3.3 million tons of bauxite raw material per year.

For information, the bauxite downstreaming project has reached a more advanced phase, namely industrialization, which generates the final product. The increase in value of bauxite from ore valued at $30/ton can be raised to alumina valued at $380/ton and the conversion of alumina to aluminium will raise its added value to $2200/ton.

The majority of the alumina product of Phase 1 SGAR will become the main raw material for INALUM’s Aluminium Smelter in Kuala Tanjung, North Sumatera, with a capacity of 260 thousand tons per year.

Alumina is the main raw material for the production of primary aluminium products such as ingots, alloys, billets, bars, ceramics, and other products.

Mining Industry Indonesia (MIND ID) or Mining Industry Indonesia, is the State-Owned Enterprise for the Mining Industry, with members PT Aneka Tambang Tbk, PT Bukit Asam Tbk, PT Indonesia Asahan Aluminium (INALUM), PT Freeport Indonesia, dan PT Timah Tbk.