Indonesian Alumina Industry Can Serve Global Supply Chain, Coordinating Minister Says

Coordinating Minister for Maritime Affairs and Investment, Minister of Marine Affairs and Fisheries, and the Acting Governor of Riau Islands province during a discussion on the investment and industrial sectors, in Batam, Thursday (2/7). (Photo by: Coordinating Ministry for Maritime Affairs and Investment)

Coordinating Minister for Maritime Affairs and Investment Luhut B. Pandjaitan has said that the bauxite, alumina, and the derivative products will increase supply of raw materials for electric cars and reduce imports by domestic industries.

“The bauxite-processing industry is expected to transform bauxite into alumina. We can also produce alumina derivatives that can be converted to airplane fuselages, cables, copper wire, textiles, and electronic devices. In addition, bauxite derivatives can be converted to copper and nickel ore for producing electric cars. The smelter is located in Weda Bay, in North Maluku, which is close to the lithium battery factory,” Luhut said after inspecting PT Bintan Alumina Indonesia, in Riau Islands province, Thursday (2/7).

Luhut went on to say that the alumina-processing industry will also reduce cobalt imports from the Democratic Republic of Congo.

The industry is now located in a 300-hectare area and will be expanded to 500 hectares with a total investment of US$ 600 million. The investment is estimated to grow by US$ 2.5 billion in 2027.

“We have always been importing alumina. The country has bauxite-processing industry so bauxite exports are no longer needed and we can also reduce alumina imports. Inalum, for instance, has been imported from Australia. The cost will be much expensive compared to our alumina. Thus, the industry can serve domestic and global supply chains,” Luhut said.

According to him, the industry is a very strategic project since its derivative products can be exported to America, China, Japan, and other countries.

For the record, PT Bintan Alumina Indonesia has employed around 20,000 workers and less than 10 percent of them are foreign workers.

“As in Morowali and other regions, foreign workers will fill jobs that cannot be done by local workers. We have also discussed with the Governor and Regent that the workers will be deployed for Polytechnic construction. It is not true that foreign workers will steal jobs. There will be no such thing. Foreign workers will do things we cannot do yet. For example, assembling sophisticated machines that involve local workers so that there is knowledge transfer among workers. There will be a leapfrog growth for the country in developing the industry,” he said.

After the inspection, Luhut was scheduled to chair the Anchorage Area and Cable Arrangement Coordination Meeting. Also attending the meeting were, among others, Minister of Marine Affairs and Fisheries Edhy Prabowo, the Acting Governor of Riau Islands Province Isdianto, Secretary of the Riau Islands Provincial Government TS Arif Fadillah, Batam Mayor Muhammad Rudi, and other related parties.

“We have discussed the arrangement of three anchorage areas, the areas that have been determined are  Tanjung Balai Karimun Waters, Nipah Waters, and Galang Island Waters. It is now at the execution stage and I hope we can finish it in two weeks,” Luhut told reporters after the Coordination Meeting.

Previously, there were 11 points to anchor in the waters of Riau Islands which made sea supervisory more difficult. At the meeting, Luhut also called on all relevant parties to involve  regional governments in order to boost regional income.

Furthermore, Luhut reiterated that according to the Acting Riau Governor Isdianto, Batam has reopened Lagoi Island and ready to receive tourists as they now have zero COVID-19 cases.

“Earlier, I made a phone call with Singaporean Foreign Minister Vivian Balakrishnan to inform that Lagoi Island has been reopened. Minister Vivian agreed to review Indonesia’s request after Singapore’s general election,” Luhut added.

In the meantime, during his visit to Bintan, Coordinating Minister for Maritime Affairs and Investment Luhut B. Panjaitan together with Minister of Marine Affairs and Fisheries Edhy Prabowo inspected floating net cage for exports.

“In southern Batam, we will make high-quality fish floating net cage, so we can continue to increase our exports that is now growing by around 10 percent, if possible, we would make it to 100 percent. Fisheries Minister will also make net cages as in Papua, so there will be net cages in three places,” Luhut stated.

According to Edhy, Batam has enormous fish farming potential. It also does not need a big place. Pomfret fish, groupers, and lobsters can be cultivated by the locals and the demand from Singapore is quite high. What needs to be done is to attract the people to cultivate these fish. Edhy further said we must take advantage of this potential since the market is right before our eyes.

According to him, if the state budget is limited,  fish farmers can obtain credit from KUR (Smallholder Business Credit ).

“Ministry of Marine Affairs and Fisheries also has Public Service Agency (BLU) funds for the marine and fisheries capital business amounting to Rp 1.3 trillion with an interest of only 3 percent. I hope we can do this with the assistance from Coordinating Minister for Maritime Affairs and Investment,” he said. (Ministry of Communication of the Ministry of Maritime Affairs / EN)

 Translated by: Syarifah Aisyah
Reviewed by: Mia Medyana