President Joko Widodo today, Tuesday (24/09/2024), inaugurated the first bauxite injection for the Smelter Grade Alumina Refinery (SGAR) Phase 1 project of PT Borneo Alumina Indonesia (BAI) located in Mempawah Regency, West Kalimantan. This smelter is divided into two phases with a total investment of up to US$ 1.7 billion or around IDR 25.67 trillion (assuming an exchange rate of IDR 15,100 per US$), consisting of US$ 900 million for the first phase and US$ 800 million for the second phase. The first phase of the Mempawah SGAR was built with an alumina production capacity of up to 1 million tons per year.
SGAR Phase 1 is a national strategic project from the MIND ID Mining BUMN Holding or PT Mineral Industri Indonesia (Persero) and the group through subsidiaries of PT Indonesia Asahan Aluminum (Inalum) and PT Aneka Tambang Tbk (ANTM), namely PT Borneo Alumina Indonesia (BAI). With the operation of SGAR, this indicates that Indonesia has an integrated bauxite downstream project to downstream products in the form of aluminum.
MIND ID President Director Hendi Prio Santoso said that this is an important achievement in the metal mineral industry in the country. With the inauguration of the first bauxite injection of the SGAR project, this makes the project integrated from upstream to downstream, from bauxite mining to later being processed into alumina to then be sent as raw material for aluminum to be produced by Inalum.
After this phase 1, the company will continue to work on the second phase project with an alumina production capacity of 1 million tons per year. For this reason, his party also asked for support from the local government to facilitate investment in the next phase, both in terms of licensing, land acquisition, and so on.
“But with our vision of carrying out full bauxite downstreaming and also wanting to help the government ease the burden on foreign exchange, we will increase aluminum production to reach 900 thousand tons, so additional raw materials are needed, so we are ready to add another 1 million tons (alumina),” he explained.
Second, he continued, there will be the creation of economic output of more than IDR 150 trillion.
This Phase 1 SGAR will later connect the supply chain between bauxite ore minerals in West Kalimantan produced by PT Aneka Tambang Tak (ANTM) and the Inalum aluminum smelter in Kuala Tanjung, North Sumatra. Bauxite ore mineral injection is the first series in the alumina production process with the first alumina production target planned for November 2024. The commissioning or trial process will be carried out in stages with a gradual increase in production or ramp up production until December 2024.
The SGAR Phase 1 Project is planned to enter the full alumina production stage in the first quarter of 2025, with a target commercial operation date (COD) or commercial operation at the end of February 2025. The SGAR Phase 2 Project is an expansion of the SGAR Phase 1 Project which will also be located in Mempawah, West Kalimantan and will also have an alumina production capacity of up to 1 million tons per year with an operational target in 2028.
Through the operation of the SGAR Phase 1 and Phase 2 Projects, domestic alumina production will increase to 2 million tons per year with the absorption of bauxite ore minerals reaching 6 million tons per year.
This is in line with Inalum’s corporate action plan to increase its aluminum production capacity to 900,000 tons per year. In addition, Inalum’s aluminum smelter currently has an aluminum production capacity of up to 275,000 tons per year, all of which are prioritized to meet domestic aluminum needs.
September 24, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20240924114314-4-574152/sah-ri-punya-proyek-hilirisasi-bauksit-aluminium-terintegrasi-pertama)