Smelter Construction Target Misses Target, MIND ID Admits Loss

Illustration. (Photo: Doc. Antara)

JAKARTA - The progress of the construction of the Smelter Grade Alumina Refinery (SGAR) processing and refining facility in Mempawah, West Kalimantan, has only been running at around 13.78 percent of the target that should have touched 71 percent.

Director of Operations and Portfolio of MIND ID, Danny Praditya admitted that with the slow pace of the project, MIND ID suffered losses due to fixed costs that had to be incurred every month. Even though based on the initial development target, this smelter can already operate in 2023.

"Apart from the investment side, we also experience losses because there are costs incurred every month. It should have finished at 71 percent now, but now the actual delay is still 13.7 percent," Danny said in an RDP with Commission VII DPR RI, Monday, 21 March.

The SGAR project is managed by PT Borneo Alumina Indonesia (PT BAI) which is owned by PT Inalum (Persero) with a 60 percent stake and ANTAM with a 40 percent stake.

Meanwhile, SGAR is targeted to enter the commercial operation date (COD) stage in 2023. After operating later, SGAR is projected to have a production capacity of 1 million tons of alumina.

Based on his narrative, the delay was caused by PT Pembangunan Perumahan (Persero) Tbk (PTPP) and China Aluminum International Engineering Corporation Limited, as the Indonesia-China consortium, yet to find an agreement on a number of issues.

To solve this problem, Commission VII DPR RI asked Borneo Alumina Indonesia to conduct a thorough evaluation of the performance of the Chalieco consortium and PTPP as the executor of the alumina smelter project.

Commission VII also asked the President Director of Inalum and the Managing Director of Antam to resolve the dispute no later than April 30, 2022, by involving law enforcement officials (the Attorney General's Office and BPKP). If this request is not resolved, then Commission VII DPR RI recommends terminating the contract.