Bauxite Miner, China Co in Talks to Build Refinery

PT Harita Prima Abadi Mineral, Indonesia's largest bauxite producer by volume, is in talks with a Chinese alumina producer to build an alumina refinery in West Kalimantan, Dow Jones Newswires reported on Tuesday (13/11/07).

The plant would be built near PT Harita's mine, said a company official, who wished to remain anonymous. "We're negotiating with them to open an alumina plant," he said.

PT Harita has been seeking a partner to build a refinery in case the Indonesian government imposes a limit or ban on exports of bauxite, an ore used to produce alumina, the primary input for aluminum.

Indonesia's exports of bauxite have soared in recent years to feed Chinese demand. In January to May, Indonesia exported 3.95 million tons of bauxite, according to the latest available data from the Trade Ministry. That's more than exports in all of 2005, which totaled 2.5 million tons.

China's alumina industry, led by rapid expansions by private alumina producers in the coastal province of Shandong, has grown heavily dependent on imported bauxite.

Nearly 60% of private alumina refineries, including Shandong Xinfa Aluminum & Electricity Group Co., Weiqiao Aluminum Co. and Shandong Nanshan Aluminum Co., rely upon imports, with about 70% coming from Indonesia, according to Macquarie Research.

PT Harita is a subsidiary of PT Cipta Panelutama, a Jakarta-listed company. Its output in 2007 is expected to be about 3 million tons, nearly double the next biggest producer, PT Aneka Tambang, although no official figures are available.
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