MEC TO DEVELOP $5.6B SMELTING PROJECT

Madhu Koneru Executive Vice Chairman

MEC PRESS RELEASE

MEC TO DEVELOP $5.6B SMELTING PROJECT

East Kutai regent Isran Noor said Wednesday that a Dubai-based company and an Indian aluminum producer had started the development of an aluminum smelter in Muara Wahau, East Kutai, East Kalimantan.

In addition to the smelter, the two companies — Mineral, Energy, Commodities (MEC) Coal and National Aluminum Co. (Nalco) — would also set up a power plant with a total capacity of 1,400 megawatts and 142 kilometers of railway track connecting Muara Wahau and a port in Lubuk Tutung, Isran reported.

“The total investment for the project reaches US$5.6 billion. They have started the development and we hope that by the end of 2012, the smelter can begin operating with a total capacity of 500,000 metric tons per year,” he told reporters after a discussion on coal mining in Jakarta.

The smelter would be built near the coal mining site of PT Tekno Orbit Persada, a subsidiary of MEC Coal, in Muara Wahau, Isran said. The smelter was designed to process bauxite into aluminum, he added.

MEC TO DEVELOP $5.6B SMELTING PROJECT

He revealed that of 1,400 megawatts capacity of the planned power plant, 200 megawatts would be utilized for people living around the power plant.

MEC said in a press statement available on its website that the projects would create around 5,000 jobs. The company also plans to build a fertilizer plant in East Kalimantan.

MEC Coal is a subsidiary of Dubai-based MEC holdings and the Ras Al-Khaimah Investment Authority, while MEC holdings is a subsidiary of Dubai-based Trimex Group, which invests in the energy and mineral sectors.

According to MEC Coal’s website, Tekno Orbit Persada’s coal concession is located approximately 125 kilometers northwest of the coastal town of Sangatta and covers 5,000 hectares of mining land.

The mining concession contains Joint Ore Reserves Committee (JORC) compliant resources of 1.5 billion tons of environmentally friendly coal.

MEC TO DEVELOP $5.6B SMELTING PROJECTLast month, Russia also expressed its interest to set up nickel and copper smelters in East Kalimantan. The country said it had prepared around $6 billion to fund the planned investments. The raw materials will be taken from Sumbawa in West Nusa Tenggara province, Papua province and Halmahera in North Maluku province.

PT Aneka Tambang (Antam), the country’s second largest nickel producer, also plans to build an aluminum smelter in Tayan, West Kalimantan. The plant will have an installed capacity to smelter 300,000 tons per year. On February, PT Newmont Nusa Tenggara, the operator of the Batu Hijau gold and copper mine, announced it would not build a smelter in its operation area. The company’s feasibility study showed that the project was not economical due to the difficulty of securing a raw material supply.

The 2009 Law on Mineral and Coal stipulates that starting 2014, all miners are no longer allowed to export raw mine products.

Indonesia has the only aluminum smelter in Southeast Asia located in Asahan, North Sumatra. The smelter, which was built in 1976, is currently operated by PT Indonesia Asahan Aluminium (Inalum). Inalum allocates only 40 percent of production to the domestic market, while exporting the rest to Japan.

MEC TO DEVELOP $5.6B SMELTING PROJECT

MEC TO DEVELOP $5.6B SMELTING PROJECT

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http://www.mec-holdings.com/press/201107_mec.html

Web Source:

http://www.thejakartapost.com/news/2011/07/28/dubai-firm-develop-56b-smelting-project.html

http://www.thejakartaglobe.com/archive/kalimantans-56b-smelter-to-operate-in-2012-official/455640/

http://www.arabianbusiness.com/indonesia-eyes-2012-start-for-5-6bn-uae-india-project-412788.html