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tate-owned mining firm PT Antam Tbk. said it had officially begun construction of the company’s chemical grade alumina (CGA) plant in Tayan, West Kalimantan, with total investment of about US$450 million.

Antam corporate secretary Bimo Budi Satriyono said in Jakarta on Monday that a consortium of three construction and engineering companies — PT Wijaya Karya Tbk. (WIKA), Japan Tsukishima Kikai Co. Ltd. and PT Nusantara Energi Abadi (Nusea) — had been named to build the CGA plant.

“Antam will operate the CGA plant in cooperation with Japan’s Showa Denko KK,” he said, adding that two companies had established joint venture PT Indonesia Chemical Alumina (ICA) to operate the plant. Antam owns an 80 percent stake in the joint venture while the Japanese company holds the remaining 20 percent.

Bimo said construction of the plant would be financed by internal funds and loans from the Japan Bank for International Cooperation (JBIC) and Japan Oil, Gas and Metals National Corporation (JOGMEC).

The construction of the Tayan CGA plant, which would have an installed capacity to produce 300,000 tons a year, is scheduled to be completed within 32 months. If plans proceed on schedule, the plant would begin commercial production in January 2014.

The term CGA collectively refers to aluminium hydroxide and alumina for applications other than aluminium smelting. For example, aluminium hydroxide, an intermediate product in alumina production, is used as a coagulant for water purification, whereas alumina is widely used for the smelting of aluminium metal. Antam expects that this
project would generate optimal returns for its shareholders through the processing of its vast, high-quality bauxite reserves, Bimo said, adding that the CGA project would have potential revenue of $200 million annually.

The Tayan CGA project is part of Indonesia’s Master Plan of Development Acceleration and Extension 2011-2015 for the Kalimantan Corridor. (drs)