Gov’t Continues to Develop Downstream Industries

In a bid to increase added values of Indonesia’s domestic raw materials, the Government is committed to consistently developing downstream industries, Minister of Industry Airlangga Hartarto has said.

According to Airlangga, developing downstream industries has also been proven to spur investment, provide employment, and increase foreign exchange earnings from exports, all of which can boost economic growth.

“Developing downstream industries does not only to implement Law Number 3 of 2014 on Industry, but is also the concern of President Joko “Jokowi” Widodo so we no longer need to export raw materials. We must dare to export semi-finished or finished goods,” Airlangga said in Jakarta, Saturday (6/4).

The Minister added the Government is developing the downstream sector, among others, aluminum processing industry. This industry does not only develop its upstream sector, but has also shifted to developing downstream products and components. This is one of the targets set in the 2015-2035 National Industrial Development Master Plan (RIPIN), which is to further foster the country’s industrial structure.

“We have recently developed several metal mineral-based processing industries, including the processing of bauxite ore into alumina which will be processed into aluminum metal,” said Airlangga.

To that end, Ministry of Industry expressed its appreciation to state-owned mining holding company PT Indonesia Asahan Aluminum (Inalum) that has collaborated with state-owned diversified miner PT Aneka Tambang (ANTAM), through their joint venture subsidiary PT Borneo Alumina Indonesia (PT BAI) in constructing Smelter Grade Alumina Refinery in Bukit Village Batu, Mempawah Regency, West Kalimantan.

“By constructing this smelter, we hope to speed up the development of domestic alumina and aluminum processing facilities, which in turn will increase the capacity of national aluminum industry,” said the Ministry’s Director of Metal Industry Dini Hanggandari.

For the record, the processing capacity of bauxite to alumina in Indonesia currently reaches 1.3 million tons per year comprising 1 million tons of smelter grade alumina and 300,000 tons of chemical grade alumina.

“So, from the Smelter Grade Alumina project in Mempawah, there will be an increase of 1 million tons of alumina per year,” Dini said.

The alumina refinery – managed by PT Borneo Alumina Indonesia (BAI) – will be built on an area of ??288 hectares in three villages in Mempawah Regency, West Kalimantan. The investment is estimated to reach USD850 million and is targeted to start production in early 2022. The refinery will also be equipped with a coal-fired power plant with the capacity of 3 x 25 megawatts.

The project is expected to boost economy in West Kalimantan province, particularly in Mempawah Regency with the potential for additional regional income, providing employment both directly and indirectly, as well as for implementing community empowerment programs around the project site.

“We hope the construction will run smoothly and Mempawah can be more advanced,” Deputy Governor of West Kalimantan Ria Norsan said, adding that the project is part of the Government’s infrastructure program.

In the meantime, President Director of PT Inalum Budi G. Sadikin said that the launching of the Alumina Purification Plant was part of a series of efforts to implement the Government’s Mining Industry Holding policy, that is, to encourage the development of downstream mining products.

“PT Inalum, which has the only aluminum refining plant in Indonesia, will obtain domestic alumina supplies. This move saves USD200 million per year in state finance,” Budi said.

Meanwhile, President Director of PT Antam Arie Prabowo Ariotedjo stated that the Smelter Grade Alumina Refinery project is a strategic development project for Indonesia. “As a company with significant bauxite resources, PT. Antam seeks to realize the added value of its mineral commodities to provide added value to shareholders and stakeholders,” he said. (Ministry of Industry PR/EN)

Translated by: Muhardi

Edited by: M. Ersan Pamungkas