Press Metal expands upstream with alumina refinery JV in Kalimantan

KUCHING (Sept 19): Press Metal Aluminium Holdings Berhad has entered into a shareholders’ agreement and share subscription agreement with PT Alakasa Alumina Refineri (AAR), PT Dinamika Sejahtera Mandiri (DSM) and PT Kalimantan Alumina Nusantara (KAN).

This is to set up a strategic joint venture where KAN will establish and operate an integrated alumina refinery plant, power plant, jetty and supporting infrastructure in Sanggau, West Kalimantan, Indonesia.

The refinery is expected to have an annual production capacity of 1 to 1.2 million metric tonnes, with a potential expansion to double this output.

The total cost for Phase 1 is US$750 million, or about RM3.238 billion.

Press Metal will subscribe for 80 per cent equity interest in KAN for a total subscription price of RM1.036 billion, executed in seven tranches over the next year, and funded through the Group’s internally generated funds.

AAR and DSM shall hold 19.77 and 0.23 per cent, respectively.

Group chief executive officer Tan Sri Paul Koon said the project represents a unique opportunity to drive sustainable long-term growth.

“By partnering with AAR and DSM through this joint venture, we are not only expanding our upstream business operations but also unlocking synergies that will enhance the overall value of the Press Metal group.

“This venture aligns with our strategy to reinforce and continuously strengthen our leading position as the largest smelter in Southeast Asia and boost our competitive edge across the aluminium value chain.

“It is an effective approach towards expanding our upstream presence while ensuring higher self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations.

“This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency.

“With a long-term offtake agreement expected to commence once the refinery is operational, we anticipate cost savings that will further optimise our overall operations”, he said.