Inalum to make aerospace, electronics components

State-owned PT Indonesia Asahan Aluminium (Inalum) will diversify its product range by producing aluminum alloys and baked carbon anodes to supply the aerospace and electronics industries.

Sahala Sijabat, the president director of Inalum, which only a few months ago was taken over by the government, said the company would also produce aluminum alloy as well as aluminum ingots.

Aluminum alloy is a mixture of aluminum and other elements that make end products stronger and more durable.

The product is commonly used in aircraft manufacturing.

Sahala previously told The Jakarta Post that Inalum would also sell baked carbon anodes, which are mainly used for electronic devices, such as radios, televisions and computers.

“We currently only produce aluminum slack and ingots, of which 80 percent is for the domestic market. We want to diversify our products and expand our market,” he said, adding that Inalum currently produced 250,000 tons of aluminum products per year.

Industry Minister MS Hidayat meanwhile said during a press conference that he expected Inalum to maintain its performance or even do better than when the company was part of Japan’s Nippon Asahan Aluminium (NAA) consortium.

Inalum, which runs the only aluminum smelter in Southeast Asia, was previously owned by NAA under a 30-year contract between Indonesia and the consortium. The contract expired on Oct. 31 last year.

Inalum has been fully owned by Indonesia after the government declined to extend the contract, and the two sides eventually agreed to part ways, with Indonesia paying US$556.7 million for the 58.88 percent stake held by the Japanese.

Hidayat said that the firm planned to increase its production by 400,000 tons in the next five years, taking its total production to 650,000 tons.

However, Sahala explained that the firm would require up to $2 billion to finance all of its business plans.

He said that Inalum would build a new smelter, two new factories and a 600-megawatt steam-driven power plant to boost its production.

Inalum would also collaborate with state-owned diversified miner PT Aneka Tambang (Antam) in building a smelter-grade alumina refinery, to convert bauxite into alumina, in Mempawah, West Kalimantan, Sahala said.

“By having an alumina refinery, we can end our imports of alumina [an intermediate aluminum product],” he said, adding that his firm currently imported around 500,000 tons of alumina from Australia.

Sahala said, however, that his firm was still waiting for a government regulation granting the company official status as a state-owned enterprise before continuing its joint-feasibility study with Antam for the refinery project.

“We hope that we will soon get our official status so that we can choose our board of directors and develop our business plans,” he said.

Coordinating Economic Minister Hatta Rajasa said in the press conference that a draft of a government regulation to grant official state-owned status on Inalum would be signed by the President some time this month.

“The government will also complete all pending matters to smooth the firm’s expansion plans,” he said.

Among the pending matters are the transfer of land ownership, water-power plant management and environmental programs in Inalum’s operating areas, which are all still owned and operated by Otorita Asahan, a special agency established by the government to oversee Inalum’s operations when the firm was still part of the NAA.

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