The government is prioritising the downstream processing of bauxite\nto optimise the added value of the commodity and accelerate national\neconomic growth, leveraging Indonesia\u2019s position as the world\u2019s\nsixth-largest holder of bauxite reserves with 1.2 billion tonnes\nrecorded in 2022. According to the Investment Ministry\u2019s strategic\nroadmap, global demand for aluminium products is projected to reach\n243.98 million tonnes per year by 2050, driven primarily by the\ntransport and construction sectors. In line with the development of the\nelectric vehicle and renewable energy industries, the priority targets\nfor bauxite downstreaming include the production of solar panel\ncomponents and electric vehicle parts.<\/p>\n
Investment in the sector has shown significant momentum. Realisation\nof bauxite downstreaming investment reached Rp 53.1 trillion in 2025, a\nsharp increase of 143.58% year-on-year from Rp 21.8 trillion in 2024.\nThis positive trend continued into the first quarter of 2026, with\ninvestment realisation recorded at Rp 13.7 trillion, up 6.70% compared\nto the same period the previous year. Currently, more than a dozen\ncompanies are developing production facilities for products ranging from\nchemical grade alumina (CGA) and smelter grade alumina (SGA) to\naluminium ingots, alloys, and anode carbon.<\/p>\n
Three of these companies are part of the state-owned mining holding\nMIND ID: PT Indonesia Asahan Aluminium (Inalum), PT Indonesia Chemical\nAlumina (ICA), and PT Borneo Alumina Indonesia (BAI). Inalum operates a\nsmelter in Kuala Tanjung, North Sumatra, with an annual capacity of\n275,000 tonnes of aluminium. ICA runs the only CGA plant in Indonesia,\nlocated in Tayan, West Kalimantan, with a capacity of 300,000 tonnes per\nyear, and is 99.998% owned by PT Aneka Tambang Tbk (ANTM).<\/p>\n
BAI, a joint venture between ANTM and Inalum with respective\nshareholdings of 40% and 60%, has completed the construction of the\nfirst phase of its Smelter Grade Alumina Refinery (SGAR) in Mempawah,\nWest Kalimantan. The facility, with a capacity of 1 million tonnes per\nyear, began full operations in 2026. BAI President Director Darwin Saleh\nSiregar stated that the SGAR is a strategic project designed to close\nthe gap in the national aluminium industry chain by linking ANTM\u2019s\nbauxite production to Inalum\u2019s smelter. Approximately 60% of the SGA\noutput is allocated to supply Inalum\u2019s smelter in Kuala Tanjung, while\nthe remaining 40% is marketed to other customers, including exports to\nChina and India. Around 5% of the product is also absorbed by the water\ntreatment and chemical industries.<\/p>\n
The refinery requires approximately 3 million to 3.2 million tonnes\nof washed bauxite to produce 1 million tonnes of SGA, with raw materials\ncurrently sourced from ANTM\u2019s mining permit area in Tayan, West\nKalimantan. Darwin noted that the operation has eliminated Inalum\u2019s\ndependence on imported alumina and significantly increased the value of\nbauxite, with alumina prices ranging from US$340 to US$400 per tonne,\nroughly 10 to 11 times higher than the price of bauxite ore. The MIND ID\ngroup is now preparing for the second phase of the SGAR project, which\nhas reached the Final Investment Decision stage. The expansion, located\nadjacent to the first phase, is estimated to require US$890 million in\ninvestment and will double the total production capacity to 2 million\ntonnes of alumina per year, with commercial operations targeted for late\n2028 or early 2029.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/accelerating-bauxite-downstreaming-to-boost-national-aluminium-ecosystem-1784537420", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }