SGAR, a project worth boasting for PT BAI, is potent in boosting regional economy

The smelter grade alumina refinery (SGAR) multi-phased project of PT Borneo Alumina Indonesia (BAI) as a joint venture between PT Indonesia Asahan Aluminium (Inalum) and PT Aneka Tambang (Antam), is projected to give economic benefits for Mempawah region, West Kalimantan.

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The project, which involves a total of US$ 900 million (RP 14.5 trillion) worth investment, is scheduled to be executed in phases. The project will positively boost employment in the region as the opening of SGAR will attract job openings to the surrounding community.

The development of Indonesia's aluminium industry holds substantial promise despite the slow progress seen in recent years. A senior government official had earlier revealed that till date one of the cumulative eight alumina refinery undertakings in the government's ambitious pipeline has shown noteworthy progress.

According to Asian Metal, the 1Mtpa Smelter Grade Alumina Refinery project, by BAI and constructed by China Aluminium International Engineering Co., Ltd., kick started production on December 30, 2024.

In the meanwhile, market research shows that the recently-opened PT Borneo Alumina Indonesia (BAI) is potent to bring 1 million tonnes of alumina capacity alone by 2025. In the coming years, seven additional alumina refineries are set to begin operations, which will add 9 million tonnes of alumina production capacity. If all 11 alumina refineries launch as scheduled, the total alumina production capacity could reach 16 million tonnes within the next five years. The PT Borneo Smelter Grade Alumina Refinery (SGAR) project is key to making this possible, with an estimated production of around 1 million tonnes of alumina once it becomes fully operational. Additionally, the opening of the SGAR project is expected to have a positive impact on local employment, as it will create job opportunities for the surrounding community.

"The presence of PT Borneo Alumina will open up employment opportunities, and drive the wheels of the economy, starting from increasing needs or fulfilment from the community as suppliers of goods, materials as well as labour. It will also drive economic growth," Leonard M. Manurung, President Director at PT BAI, said as quoted by CNBC Indonesia in October 2024.

He stated that the factory operated by the company will significantly contribute to economic growth in West Kalimantan. Furthermore, it is expected to increase the Gross Regional Domestic Product (GRDP) in the mining sector by 15.38 per cent, potentially enhancing the region's economic value.

"If we look at the portion, actually this processing industry has a huge contribution to West Kalimantan, with the existence of PT Borneo Alumina Indonesia, and later with full production, this will make a huge contribution to the economic growth of West Kalimantan," he said.

The local community will also be prioritised to be employed in SGAR. The company is also trying to develop the community's capacity around the smelter to be able to work in SGAR.

To get a detailed understanding of the country's present and future in the aluminium industry, go get our 'Indonesia Aluminium Market Report Forecast Till 2030' digital edition.