Tianshan Aluminium to build an alumina refinery in Indonesia worth US$1.6 billion

Tianshan Aluminium Group, China’s second-largest aluminium producer by capacity, will reportedly invest US$1.6 billion to build an alumina refinery in the Riau Islands, Indonesia. Since Indonesia is rich in bauxite and coal and has low labour costs, building a plant here can improve Tianshan’s supply of raw materials.

The plant will have an annual capacity of 2 million tonnes. But initially, it will produce 1 million tonnes of aluminium oxide a year, requiring an investment of US$952 million. However, the construction schedule is not yet revealed.

Tianshan Aluminium Group produces primary aluminium, alumina, high-purity aluminium, pre-baked anodes, aluminium deep-processed products, and other materials. The company has been raising its annual aluminium oxide capacity in recent years. In 2022, it produced over 1.5 million tonnes of oxide, up by 70 per cent over a year, in contrast to 1.5 million tonnes of electrolytic aluminium output for the past few years. This year, Tianshan aims to produce 2.5 million tonnes of aluminium oxide.

Tianshan said it would also set up a wharf and raw material yard as well as develop roads inside and around the plant.

On February 23, Tiashan Aluminium said it would buy the mining rights to three geographically adjacent bauxite mines in Kalimantan, Indonesia, for nearly US$30.3 million. One of the mines has reserves of around 68 million tonnes.

In 2022, Tianshan Aluminium’s operating revenue rose 15 per cent to a record of RMB 33 billion from 2021; however, its net profit fell 31 per cent to RMB 2.7 billion, as per the financial report released on March 17.