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Shandong allots $5b for smelter construction
Shandong Nanshan Aluminium Co
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handong Nanshan Aluminium Co. Ltd., China's second-largest aluminum product maker, will invest up to US$5 billion for the construction of mineral processing facilities this year in Indonesia, a key supplier of metal ore to China.
'We're building a smelter on Bintan Island, Riau province, that will process bauxite into aluminum. Construction began in early October and we expect to finish by October 2016,' Shandong Nanshan Aluminium chairman Song Jianbo told reporters after a meeting with Industry Minister MS Hidayat on Wednesday.
The bauxite to supply the smelter would be collected from various mines in Riau, Jianbo said, adding that the smelter was expected to produce 2.1 million tons of alumina and 570,000 tons of ingots per year.
'We plan to export the alumina to various countries such as China, the US and Japan. The alumina will also be used in Indonesia,' he said.
Jianbo said, however, that he had not determined how much alumina would be exported and how much would be allocated for domestic use.
'We have to assess our needs first before we do that,' he said.
According to Jianbo, his company has partnered with PT Mitra Karsa Utama for the construction of the smelter. 'Our local partner has a 5 percent share in this project,' he said.
Indonesia supplied 80 percent of China's bauxite imports in 2011.
As of now, Indonesia only has one aluminum smelter operated by PT Indonesia Asahan Aluminum (Inalum) in North Sumatra, which annually produces 250,000 tons of aluminum ingots, 60 percent of which is exported to Japan.
The Energy and Mineral Resources Ministry's director general for coal and minerals, Thamrin Sihite, was quoted by tempo.co in late September as saying that 125 companies had expressed interest in building mineral smelters in 2014.
Right now, a number of mining experts are evaluating proposals that were submitted by the companies.
Meanwhile, construction of an aluminum smelter by PT Well Harvest Winning Alumina Refinery, a joint venture between PT Harita Group and China Hongqiao, started in July 2013 in Ketapang, West
Kalimantan.
The alumina smelting grade produced by the smelter will be used to supply raw material needs for the Inalum smelter.
The demand for alumina smelting grade has reached about 500,000 tons a year. (ogi)
