Inalum must increase transparency: Govt

PT Indonesia Asahan Aluminium （Inalum） must be more transparent and provide required reports to the State-Owned Enterprises Ministry — something it has not done for five years, said a ministry official.

“The company has not reported its production and financial condition to the ministry for almost five years,” State-Owned Enterprises Ministry Secretary Said Didu said in Jakarta last week.

Although the government is not the company’s majority shareholder, Inalum is obliged to regularly report on its production and finances to the ministry, Didu said.

“The government has a 41-percent stake in Inalum and should be informed of its financial condition. I have not received any reports from Inalum since the government appointed me secretary of the ministry,” he added.

Inalum does submit financial reports to Otorita Asahan, a special agency established to supervise the Asahan development project, said another official. 

Otorita Asahan oversees two large hydropower plants, PLTA Siguragura and PLTU Tangga, and the Inalum smelting plant.

The agency was established by presidential regulation No. 5 1976 as part of the Asahan project agreement between the government and 12 Japanese companies.

Otorita Asahan chairman Effendi Sirait said the agency regularly forwarded Inalum’s production and financial reports to the State-Owned Enterprises Ministry.

“Every month, PT Inalum submits production and financial reports through the deputy minister for mining and strategic industries,” he said.

Inalum operates an aluminium smelter in Asahan, North Sumatra under a build-operate-transfer （BOT） contract, which will end in 2013. The company has formally asked the government to extend the contract.

The government said that it would soon establish a special team to decide if the contract could be extended.

The government can extend the contract if it becomes Inalum’s majority shareholder, or else the government must terminate the contract and transfer the operation of the smelting plant to another state company, such as state mining company PT Aneka Tambang （Antam） or state steel producer

PT Krakatau Steel, said a ministry official.

Indonesia currently has a 41.12-percent share in Inalum, and Nippon Asahan Aluminum Co. Ltd,  a consortium of 12 Japanese companies, holds the remaining shares Companies in the consortium include Sumitomo Chemical Co. Ltd.,  Sumitomo Shoji Kaisha Ltd., Mitsui Aluminum Co. Ltd. and Mitsubishi Corporation.

Inalum said that 60 percent of its output, almost 225,000 tons of aluminum, are exported to Japan.