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Adaro's KIPI aluminum smelter aims for full operation by early 2026
Amid the country's dearth of smelters to drive the downstream aluminum sector, Adaro Minerals is aiming to start producing 250,000 tonnes of aluminum ingots by the third quarter and eventually increase to full production by early 2026 at its smelter in KIPI, operated by subsidiary Kalimantan Aluminium Industry.
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President Joko "Jokowi" Widodo (second right) gestures as he speaks with PT Adaro Energy president director Garibaldi Thohir (third left) and Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan (right) on Dec. 21, 2021, on the sidelines of a ceremony to inaugurate the Kalimantan Industrial Park Indonesia in Tanah Kuning, in Bulungan regency, North Kalimantan. (President secretariat/BPMI Setpres/Laily Rachev)
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US$2 billion aluminum smelter built in Kalimantan Industrial Park Indonesia (KIPI) by PT Adaro Minerals, PT Adaro Energy’s coking coal subsidiary, is scheduled to be fully operational by the first quarter of 2026.
Wito Krisnahadi, director of Adaro Minerals’ subsidiary Kalimantan Aluminium Industry, said the company planned to sell the smelter’s aluminum ingots to both domestic and export markets, as local demand was “not that much” and unable to absorb 100 percent of the output.
“Traders are interested in absorbing all of the output, but we are still [considering] that, because the government wants a portion of the output to help reduce aluminum imports,” Wito told a media gathering on Wednesday in Jakarta.
He added that by the third quarter of this year, he expected the aluminum smelter to be producing 250,000 tonnes of ingots, half of its installed capacity of 500,000 tonnes.
Read also: Adaro unit plans $1.1 billion capex, mostly for smelter
According to Wito, the ingots were part of the government’s plan to develop the downstream aluminum industry, as they could be used to make value-added products like billets, rods and automotive appliances, as well as in food packaging.
For now, Adaro Minerals was focusing on ensuring that a reliable 24-7 electricity supply was available to operate the smelter in Bulungan, North Kalimantan.
