Chinese Firm to Kick Off Construction on Bintan Bauxite Smelter in January


DECEMBER 04, 2015

Jakarta. Shandong Nanshan Aluminium, China's second-largest aluminum producer, will start construction on its $2 billion manufacturing complex in Bintan, Riau Islands, in January.

The company is set to build a smelter, dams and a 2,800-megawatt power plant to produce aluminium ingots, powder, foil and sheet, Riau interim governor Agung Mulyana said on Thursday.

"It has been decided that we will establish a 2,000-hectare industrial complex in Bintan," he said, adding that the company would source bauxite from Kalimantan.

The plant is estimated to create between 7,000 to 9,000 jobs for local residents and 2,000 positions to be filled by foreign workers.

The company provided no information on the facility's maximum capacity, but earlier reports suggested that Nanshan aimed to produce 2.1 million tons of alumina and 570,000 tons of aluminum ingots each year.

Riau would also benefit from 300 megawatts of excess power from the plant, Agung said.

Still, when the project was first announced in 2013, the government said Nanshan Aluminium would invest $5 billion and complete construction by October 2016.

Agung declined to elaborate on the reasons behind Nanshan's drop in investment or on the delay.

Nanshan Aluminum is listed in the Shanghai Stock Exchange and reported more than $16 billion in revenue last year. The company sells its products to Australia, America, Canada, Italy, Singapore and Hong Kong.

Indonesia's ban on mineral ore exports has choked supply of bauxite for China, which until last year sourced most of its ore from Indonesia.

Indonesia Asahan Aluminum (Inalum) now operates the country's only aluminium smelter in Kuala Tanjung, North Sumatra.