Adaro's KIPI aluminium smelter ramps up for full production by early 2026

Amidst the country's lack of sufficient smelters to drive the downstream aluminium sector, Adaro Minerals aims to commence production of 250,000 tonnes of aluminium ingots by the third quarter, with plans to ramp up to full production by early 2026 at its smelter in KIPI, operated by its subsidiary Kalimantan Aluminium Industry.

About the smelter

A US$2 billion aluminium smelter, constructed in Kalimantan Industrial Park Indonesia (KIPI) by PT Adaro Minerals, a coking coal subsidiary of PT Adaro Energy, is set to be fully operational by the first quarter of 2026.

Wito Krisnahadi, director of Adaro Minerals' subsidiary Kalimantan Aluminium Industry, stated that the company intends to sell the smelter's aluminium ingots to domestic and export markets. This move is in response to local demand, which Krisnahadi described as "not that substantial," indicating that it cannot absorb 100 per cent of the output.

250,000 tonnes of ingots

He mentioned that by the third quarter of this year, he anticipates the aluminium smelter will produce 250,000 tonnes of ingots, half of its installed capacity of 500,000 tonnes. Adaro's unit plans a $1.1 billion capital expenditure, primarily allocated for the smelter.

 According to Wito, the ingots are part of the government's strategy to advance the downstream aluminium industry. These ingots can be used to create value-added products such as billets, rods, automotive components, and food packaging. Adaro Minerals is currently concentrating on ensuring a consistent, round-the-clock electricity supply for the smelter operation in Bulungan, North Kalimantan.