Inalum Targets December FID for Rp 13.36 Trillion SGAR Phase II as Danantara Moves to Finance Expansion
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BOGOR, Investortrust.id — Indonesia Asahan Aluminium targets a final investment decision for its Smelter Grade Alumina Refinery Phase II in December 2025, as the company accelerates its downstream expansion valued at about Rp 13.36 trillion. State investment manager Daya Anagata Nusantara signals readiness to finance the project, strengthening Indonesia’s aluminum supply chain at a time when policymakers push for cheaper gas to support the industry.
Inalum Business Development Director Arif Haendra said the alumina refinery expansion requires US$ 800 million in capital, reflecting the remote location and the need for new logistics infrastructure. He said the company has prepared engineering and development work to ensure construction can begin next year.
He explained that a significant portion of the cost stems from transport and port-support facilities needed to secure raw materials and distribute output. He said Inalum expects Phase II of the refinery to enter full construction soon after the FID is issued.
Arif noted that Daya Anagata Nusantara will participate in funding the project, though the exact proportion of its contribution remains under discussion. He said the company could combine Danantara’s capital with external borrowing to strengthen the project’s balance sheet.
He added that the refinery expansion is scheduled for completion between late 2028 and early 2029, with a design capacity of one to two million tons of alumina per year. He said the smelter’s output will support Inalum’s broader plan to expand domestic aluminum production.
In a separate session at the same event, the Ministry of Industry said cheaper gas is essential to keep Indonesia’s aluminum sector competitive as new smelter projects come online. The ministry is preparing to propose aluminum as a beneficiary of a special gas price scheme set at US$ 6–7 per MMBTU.
Yosef Danianta Kurniawan, Head of the Non-Ferrous Metals Industry Working Team at the Ministry of Industry, said aluminum smelters still pay commercial rates of US$ 12–14 per MMBTU, creating a substantial cost gap compared with sectors already receiving subsidized gas. He said gas plays a dual role as an energy source and a process feedstock, making pricing a critical factor.
He noted that the government currently extends the special gas price to seven industries, including fertilizers, petrochemicals, oleochemicals and steel, but has yet to include aluminum producers. He said the ministry aims to expand the scheme to help downstream players benefit from growing domestic demand.
Yosef said lower gas prices would directly reduce production costs and improve the competitiveness of aluminum products manufactured in Indonesia. He said margins in metals are volume-driven, so cost reductions could deliver meaningful gains for industry performance.
He added that stable and affordable energy will be a key factor supporting large capital projects such as Inalum’s alumina refinery expansion. He said synchronized progress between refinery investment, smelter development and gas-price reform will strengthen Indonesia’s downstream ambitions.