Building New Factory, Inalum's Aluminium Production to Reach 900,000 Tonnes
Jakarta, CNBC Indonesia - PT Indonesia Asahan Aluminium (Inalum) is targeting an increase in national aluminium production capacity to 900,000 tonnes per year. This is driven by the construction of a new smelter facility.
The expansion is being undertaken to strengthen the company’s position as a global aluminium industry player while realising domestic self-sufficiency in metals.
Inalum’s President Director, Melati Sarnita, explained that the project, titled Smelter 2 Mempawah, will serve as a major transformational milestone for the company. She stated that the addition of 600,000 tonnes of capacity will elevate Inalum’s total production from the current level of 275,000 tonnes per year.
“Smelter 2 Mempawah is a transformational project for Inalum because from having a 275,000-tonne aluminium capacity, it will become 900,000 tonnes of aluminium by adding a new 600,000-tonne smelter in Mempawah,” she said during a Hearing with Commission XII of the House of Representatives (DPR RI) in Jakarta, quoted on Wednesday (15/4/2026).
As an illustration, the project requires an investment of US2.4billion, equivalenttoRp41.11trillion(assuminganexchangerateofRp17, 131perUS), with a funding structure comprising 60% loans and 40% internal equity.
The company has ensured that all physical construction is included in the list of Strategic National Projects (PSN) to accelerate the execution phase on the ground this year.
“This year is the year of execution, not planning anymore. Alhamdulillah, all our projects have been included in the national strategic projects through Permenko RI number 4 of 2026,” she added.
To support the operations of the large-scale factory, Inalum is also finalising a long-term energy supply cooperation with PT Bukit Asam Tbk (PTBA). This synergy includes the use of a coal-fired power plant (PLTU) for 30 years to ensure a reliable and efficient electricity supply for the aluminium smelter.
“Of course, we hope that the synergy between Inalum, PLN, and the relevant parties, in this case PTBA, can be realised because one of the successes of the Mempawah smelter project is the captive PLTU for the aluminium smelter,” she clarified.
Through the integration of the supply chain from upstream to downstream, Inalum is optimistic about enhancing the competitiveness of domestic aluminium products in the global market. This effort is expected to change Indonesia’s profile from merely an exporter of raw materials to a self-reliant and globally competitive metal industry nation.