Downstream Commitment of MIND ID: Full Operation of Mempawah Alumina Smelter in 2025

Jakarta, 11 September 2023 – MIND ID, the Holding State-Owned Enterprise for the Mining Industry, continues its upstream to downsteam commitment to the mining industry. The downstreaming of the mining industry still needs a boost and hard work in order to be realized as quickly as possible.

One of the efforts to raise the downstreaming process is to hasten the construction of smelters. MIND ID, through its subsidiary, PT INALUM, targets the immediate completion of the Smelter Grade Alumina Refinery (SGAR) Phase I in Mempawah, West Kalimantan, in semester II of 2024.

The development of SGAR Phase I project which began in 2019, was planned for completion and the start of operations in 2023, however, the target of completion of the bauxite processing plant to become alumina – the basic material for aluminium, is now targeted for completion in Semester II 2024.

The project of the bauxite smelting plant to become alumina is now 58 percent completed and will be 80 percent completed during the construction period at the end of 2023. After the Mempawah SGAR Phase I is completed, the commercial operation is targeted to run effectively in 2025.

Corporate Secretary of MIND ID, the Holding State-Owned Enterprise for the Mining Industry, Heri Yusuf, said that the alumina produced by Mempawah SGAR in Phase I will later become the raw material for the aluminium smelter owned by a member of the MIND ID Group, PT INALUM, at Kuala Tanjung, with the capacity of 1 million kilo ton per annum (KTPA) of alumina. The amount of alumina can become 500 thousand tons of aluminium.

“This is a challenge for MIND ID through our subsidiary, PT INALUM, to immediately complete Mempawah SGAR Phase I. When the bauxite smelter is officially operating, we can connect all the bauxite to aluminium business chain for domestic as well as export market needs,” said Heri.

The US$830 million project is expected to become a solution for the disconnected bauxite to aluminium business chain. According to Heri, at present, the bauxite products of PT ANTAM Tbk are sent first to a neighboring country to become alumina, then transported back again to the aluminium smelter.

“Upon completion, we hope that the Mempawah SGAR can connect the bauxite to aluminium business chain, which is one of the main materials for electric vehicle batteries in Indonesia,” he explained.

After completion of Mempawah SGAR Phase 1, a member of MIND ID Group’s PT INALUM, through its subsidiary, PT Borneo Alumina Indonesia (PT BAI), is planning to continue the SGAR Mempawah Phase II, with the potential addition of alumina production capacity of 2 million tons.

PT BAI is a joint venture company with share ownership of 60 percent PT INALUM and 40 percent PT ANTAM Tbk. “Both are MIND ID subsidiary companies, so PT BAI can be referred to as the grandchild of MIND ID,” he said.

The strategy set by INALUM and ANTAM in continuing the work of SGAR Phase II is to seek a strategic partner to work on SGAR Phase II. “This is required to fulfill the brownfield and greenfield expansion needs of the aluminium smelter. MIND ID continues to give added value for Indonesia, one of which is through the downstreaming of the mining industry,” he went on to say.

Moreover, INALUM has also resubmitted the SGAR Mempawah Phase I project to be included in the list of national strategic projects. The government had previously taken out the SGAR Mempawah project from the list of PSN through the issuance of Regulation of the Coordinating Minister for the Economy Number 9 of 2022 in July 2022. “The re-entry as PSN will support the completion of the project much faster,” he said. 

The extraction was based on the project, which is estimated to need an investment of US$1.7 billion, being delayed for quite some time due to problems with the EPC consortium holders, a Chinese state enterprise, China Aluminium International Engineering Corporation Ltd. (Chalieso) of 75 percent and the remainder, PT Pembangunan Perumahan Tbk (PTPP).