Chinese Hongfa, Cita Mineral Build Second Alumina Plant
in West Kalimantan

JAKARTA (TheInsiderStories)– PT Well Harvest Winning Alumina Refinery, unit of PT Cita Mineral Investindo Tbk (IDX: CITA) under Harita Group, and Hongfa Weili Alumina Co., a Chinese alumina project in Indonesia, plans to build its second line production in West Kalimantan, said the company last week. The plant is the first bauxite smelter in Indones

The one million-ton production line its expecting will be completed and put into production in 2020. Well Harvest is expected to reach an annual production capacity of 2 MT of smelting grade alumina by the end of 2020.

To finance the project, the company has been signed syndicated loan US$595 million led by DBS Bank of Singapore, with Export-Import Bank of China, Bank of China (Hong Kong), Singapore Overseas Chinese Bank, PT Bank OCBC NISP Tbk (IDX: NISP), Indonesian Eximbank, and BNP Paribas of France.

The construction of the smelter facility has been carried out since July 2013. According to Harita Group CEO, Lim Gunawan Hariyanto said, the company will try to meet the needs of alumina in the country of 500 thousand tons, including the needs from state-owned miner, PT Indonesia Asahan Aluminum.

Well Harvest project is jointly invested by China Hongqiao Group, a related listed company of Shandong Weiqiao Venture Group Co. Ltd., Harita Group, and Veolvest Investment (Hong Kong) Co. Ltd., with a planned annual investment of $1 billion.

The factory located in Ketapang, West Kalimantan. The production base covers an area of about 1,500 hectares, and gets Indonesian and China government’ attention. The project was rated as one of the three major projects that both countries led for economic cooperation at APEC Leadership Summit in 2014.

CITA owned 30 percent in the joint venture company, while China’ Hongqiao Group Ltd. hold 56 percent, Winning Investment (Hongkong) Co. Ltd. 9 percent, Shandong Weiqiao Aluminum and Electricity Co. Ltd 5 percent at the Well Harvest.

According to coordinating minister for maritime and investment affairs, Luhut Binsar Pandjaitan, said Indonesia has the sixth-largest bauxite reserves in the world and the government sees the potential of bauxite downstream could reach $13 billion next year from the current $9 billion.

“Indonesia is the top six bauxite reserves in the world, but we only export it. I have received a direct order from President Joko Widodo to tighten downstream efforts. This is so that the Indonesian mining industry can get added value,” he said on Nov. 13.

The minister went on to say if bauxite is processed into various derivatives, the value can increase up to 11 digits. This potential has not been maximized.

Therefore, the government will consider accelerating an export ban on bauxite and other mineral items such as tin, and alumina, among others, subject to the scale of investment, Pandjaitan said. Under the current rules, exports of bauxite are allowed till Jan. 11, 2022.

“Later on, if we already have investors coming in for downstream in bauxite and others like tin, asphalt, alumina, and so on, why not?” he said, adding his party in talks with several firms who are interested in investing in bauxite processing plants, including with Japanese companies.

Furthermore, the minister encouraged the development of the bauxite processing industry to be accelerated. It includes PT Indonesia Asahan Aluminum in collaboration with PT Aneka Tambang Tbk (IDX: ANTM) via its subsidiary PT Borneo Alumina Indonesia, which built the bauxite processing industry into alumina in Mempawah, Kalimantan West.

The project will reduce exports of raw minerals and simultaneously dependence on imports of raw materials for aluminum production, Pandjaitan said.

“The development of the bauxite processing industry into alumina will also encourage the birth of other investment potentials in the future, for example in the form of developing industries related to alumina-based aluminum and its diversification,” said the senior minister.

The project is built on an area of ​​288 hectares, has an initial capacity of one million tons per year. This project will also be equipped with a 3×25 megawatt coal power plant. The project investment is estimated to reach $850 million and is targeted to start production in early 2022.

Sumber:theinsiderstories.com