Inalum To Issue Us$400 Million Bond To Build New Power Plant

Jakarta (Antara Bali) - State-owned aluminum smelter PT Inalum plans to issue bonds valued at US$400 million in 2017 to raise fund to finance construction of a new power plant.

Inalum already has a hydro power plant in Asahan  in the country's biggest water fall of Sigura Gura  in the  Asahan river, the outlet of wster from Lake Toba.    

"Internal study has been made . The next step is to name a financial adviser," Inalum Finance Director Oggy A. Kosasih said here on Wednesday.

Oggy said the bond would be issued after completing the process of acquiring a 10.64 percent stake in PT Freeport Indonesia.

PT Freeport, a US company, the operator of a big copper and gold mines in Papua, is to divest part of its shares to Indonesian investors.

Oggy  said the fund from the bond sales  would be used to finance the construction of steam powered electric plant with a capacity of 2X350 megawatts in Kuala Tanjung.

In addition, Inalum is preparing the construction of a mineral smelter, a smelter grade alumina plant in Mempawah, West Kalimantan  and expansion of its KUala Tanjung port .

With the new factory , the aluminum production capacity of Inalum would double to 500,000 tons  from 250,000 tons at present per year.

"Inalum , slow but sure would be an aluminum industrial center to supply aluminum for domestic market and for exports," Oggy said.

Earlier Minister for State Enterprises Rini Soemarno she had ordered PT Inalum  and PT Aneka Tambang Tbk to acquire stake in PT Freeport Indonesia.

Under the government regulation  No.77  of 2014 Freeport was to divest  10.64 percent more of its shares not later than Oct 14 in 2015, and another 10 percent in October 2019.

The government already has a 9.36 percent stake in Freeport.

"We are ready to carry out the duty . The corporate action would come in the way of our long term plan. Entering Freeport nis also in line with the business line of Inalum," Oggy said.

State companies are  financially in a position to increase stake in Freeport Indonesia with support from state banks.

Oggy  said  currently Inalum has US$1 billion in equity, with cash in hand amounting to US$400 million and assets valued at US$1.1 billion. (WDY)