PT Aneka Tambang (Antam) and PT Indonesia Asahan Aluminium (Inalum) have signed a joint venture agreement (JVA) to develop a smelter grade alumina refinery (SGAR) in conjunction with Aluminium Corporation of China (Chalco). The plant is likely to be built in West Kalimantan, Indonesia.

Following the signing of the agreement, Antam and Inalum will form a joint venture company, PT Inalum Antam Alumina (IAA), which will be the majority stakeholder in the project with Chalco holding the remaining interest. Inalum will hold 60% of IAA and Antam 40%.

Signing of the JVA in Jakarta by Antam’s president director Tedy Badrujaman and Inalum’s president director Winardi Sunoto follows the memorandum of understanding (MoU) and heads of agreement between the two companies in 2015.

The initial annual plant capacity will be 1 million tonnes of alumina and this is expected to double when stage two is completed in the future. Antam is expected to supply bauxite to the plant, while Inalum will be the major recipient of alumina for smelting into raw aluminium.

Tedy Badrujaman said, “The cooperation between Antam and Inalum is an important step in our effort to enhance the value of Indonesia’s vast bauxite reserves as well as supporting the synergy among SOEs.”

Winardi Sunoto said, “Our partnership with Antam will support the development of bauxite ore processing to produce smelter grade alumina, the main raw material for Inalum’s aluminium smelting plant. SGAR is one of the development projects in our list.”

Inalum was founded in 1976 as a joint venture between the Indonesian government and Nippon Asahan Aluminium Co, Ltd. It was originally formed to construct and operate the Asahan Hydroelectric and Aluminium Project that dammed the Asahan River.

Inalum became entirely state owned in late 2013.

Antam is a vertically-integrated mining and metals company formed in 1968 as a conglomerate of several state-owned mining companies and projects.