Asahan cuts operating rate to 40 percent

Asahan cuts operating rate to 40 percent

TOKYO (Reuters): Nippon Asahan Aluminum Co Ltd said yesterday it had cut the operating rate of its aluminum smelter in Indonesia to 40 percent in mid-June due to low water levels at a lake that supplies power to the plant.

"Unless there is a major change in the situation, we have to be prepared to run only 190 furnaces throughout 1998/1999," an official at Nippon Asahan told Reuters.

"Our output for the year to end-March is likely to drop to around 105,000 tons, down by 120,000 tons from our usual levels when we can operate the plant at full capacity," he said.

Nippon Asahan owns 59 percent of PT Indonesia Asahan Aluminum, which runs the aluminum smelter in Sumatra. The Indonesian government holds the remaining 41 percent stake.

The official at Nippon Asahan said: "The water levels (at Lake Toba) have remained at a minimum level of 902.4 meters. We're also entering a season when we can't expect much rain."

He said there were 510 furnaces at the smelter, but due to improved efficiency it could now produce 225,000 tons of aluminum a year with 470 furnaces.

Asahan said it had been considering further production cuts due to the water shortage since May.

In April, it reduced its production plans for the current fiscal year to 175,100 tons.