Construction Starts At Chemical Alumina Plant Site In Indonesia

Showa Denko K.K. (SDK) and PT ANTAM (Persero) Tbk (Antam), of Indonesia, have started building a chemical alumina plant in the Tayan District, West Kalimantan, Indonesia, based on their agreement reached in August last year. A ground-breaking ceremony was held yesterday at the plant site, with the attendance of high-ranking officials of the Indonesian Government, representing the Ministry of State of Enterprises, Ministry of Energy and Mineral Resources, Ministry of Industry, and the Indonesia Investment Coordinating Board, as well as the Governor of the West Kalimantan Province.

The plant will produce 300,000 t/y of chemical alumina, using bauxite ores in West Kalimantan. The term "chemical alumina" refers collectively to aluminum hydroxide and alumina for applications other than aluminum smelting. Aluminum hydroxide, an intermediate product in alumina production, is used as coagulant for water purification. While alumina is widely used for the smelting of aluminum metal, alumina is also used for the production of functional materials and electronic materials. Applications include refractories, abrasives, building materials, IC packaging, and materials for LCD glass.

SDK has already decided to terminate disposal of bauxite residue into the sea by the end of 2015 and withdraw from the chemical alumina production at Yokohama. SDK will use chemical alumina products from the new plant to replace the current products from its Yokohama Plant, and sell them to customers inside and outside Japan. Chemical alumina products from the new plant will also be sold in Indonesia and neighboring countries to meet growing demand for use in water purification and refractories. The new plant will start operations in January 2014.

PT Indonesia Chemical Alumina (ICA), which is owned 80% by Antam and 20% by SDK, will operate the plant. The project cost will be financed by the two parent companies' investment in ICA, a loan from the Japan Bank for International Cooperation (JBIC), and bank loans with debt guarantee provided by the Japan Oil, Gas and Metals National Corporation (JOGMEC).

SDK has been producing chemical alumina at Yokohama for many years. With the scheduled transfer of production to Indonesia, SDK will meet an increasing demand for chemical alumina in the growing Southeast Asian market by ensuring stable supply of the product based on its accumulated technologies.