BUSINESS

PRESS METAL TAKES UP 25 PCT IN INDONESIAN ALUMINA REFINERY FOR US$80.2 MILLION

15/11/2019 10:21 PM

KUALA LUMPUR, Nov 15 -- Southeast Asia's largest aluminium smelter, Press Metal Aluminium Holdings Bhd, is securing a long-term supply of alumina by subscribing to 25 per cent equity interest in PT Bintan Alumina Indonesia (PT BAI) for US$80.23 million (RM331.36 million). 

 PT BAI, which is yet to start commercial production, is currently constructing a 1.0 million-tonnes-per-annum alumina refinery plant in Galang Batang, Indonesia, with another 1.0 million-tonne expansion in the pipeline. 

In a statement, Press Metal said the share subscription agreement inked today would provide the company with the supply of alumina via the purchase of not less than 50 per cent of alumina produced before completion of the project and up to 1.5 million tonnes on completion of the project.

“With this, reliance on third-party suppliers for alumina needs will reduce considerably, providing stability for Press Metal’s smelting operations,” the company added.

Group chief executive officer Tan Sri Paul Koon said this was an exceptional opportunity for Press Metal to invest in a refinery which would enable the company to secure supply of alumina, one of the main raw materials for its Sarawak-based smelting operations.

“Together with our earlier acquisition of (Australia-based) Worsley, we will be able to cover approximately 80 per cent of our enlarged alumina requirements moving forward.

“This will strengthen us vertically and provide us with an edge as we remove some uncertainties or supply constraints which could lead to operational disruptions,” Koon said.

He said this was vital as the company was now growing its smelting operations and its new smelter was targeted to start at the end of next year.

Koon said the asset was also located in closer proximity to Samalaju, where the company's smelter plants are sited, compared to Australia and would enable Press Metal to enjoy shorter lead-time and capture considerable logistic cost savings.

-- BERNAMA

 


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