PT Antam, Showa Denko Begin Construction on Chemical Grade Alumina Plant in Indonesia

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Researched by Industrial Info Resources (Sugar Land, Texas)--PT Antam Tbk (Jakarta, Indonesia) and Showa Denko Incorporated (TYO:4004) (SDK) (Tokyo), in association with PT Wijaya Karya Tbk (Jakarta), PT Indonesia Chemical Alumina (Jakarta), and Tsukishima Kikai Company Limited (TYO:6332) (Tokyo), recently began construction on a chemical alumina plant in Indonesia. PT Indonesia Chemical Alumina, which will operate the plant, was established by PT Antam, SDK, and Marubeni Corporation (TYO:8002) (Tokyo) in 2007. PT Antam bought Marubeni's share in 2010.

Alumina, also known as aluminum oxide, is an intermediate component in aluminum production and is derived from bauxite processing. Chemical-grade alumina is chiefly used in water purification and electronics. PT Antam, which owns one of the largest bauxite reserves in Indonesia, will provide the plant with feedstock, and SDK will provide the production technology.

Construction of the $450 million plant began in January under the consortium led by Tsukishima Kikai. The plant, which is approximately 500 kilometers northeast of Jakarta in Kalimantan Barat, will feature a coal-fired power station and port facilities. PT Antam and SDK are planning for an initial capacity of 300,000 metric tons per year when the plant is completed in 2014.

SDK, which will close its Yokohama, Japan, production site by 2015, will import a third of the Indonesia plant's capacity annually. Ocean dumping of bauxite residue has become a serious issue for the Yokohama plant, and SDK hopes that ceasing production will eliminate the problem. The remaining 100,000 metric tons of the annual capacity will stay in Oceania and will be applied toward water purification technology.

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