PRESS Metal Aluminium Holdings Bhd has announced a partnership with three Indonesian companies to operate an alumina refinery plant in West Kalimantan, Indonesia.

The initial phase of the plant is expected to have an annual production capacity of one to 1.2 million tonnes, with potential expansion to double this output.

The cost for phase one is projected at US$750 million (RM3.24 billion), funded through equity and loans, according to the group’s statement.

The Indonesian partners include PT Alakasa Alumina Refineri (AAR), PT Dinamika Sejahtera Mandiri (DSM), and PT Kalimantan Alumina Nusantara (KAN).

AAR, based in Jakarta, is an investment holding company; DSM is engaged in bauxite mining in Sanggau, West Kalimantan; and KAN, also based in Jakarta, is a domestic limited liability company.

KAN’s latest audited financial statements for the year ending December 31, 2023, show net assets of 10.95 billion rupiah and a loss after taxation of 54.57 million rupiah.

KAN will set up and operate an integrated alumina refinery plant, power plant, jetty, and supporting infrastructure in Sanggau.

Press Metal will acquire an 80% equity interest in KAN for RM1.04 billion, to be executed in seven tranches over the next year, funded through the group’s internal resources.

AAR will take a 19.77% stake, and DSM will hold the remaining 0.23%.

Press Metal Group CEO Tan Sri Paul Koon stated that the project offers a unique chance for sustainable long-term growth.

“By partnering with AAR and DSM through this joint venture, we are not only expanding our upstream business operations but also unlocking synergies that will enhance the overall value of the Press Metal group,” Koon said.

He also highlighted that the venture will improve self-sufficiency and provide a stable alumina supply, crucial for its smelting operations.

“This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency. With a long-term offtake agreement expected to commence once the refinery is operational, we anticipate cost savings that will further optimise our overall operations,” he added.

Press Metal’s share price fell by 4 sen or 0.8% to RM4.85 today, giving the company a market capitalisation of RM39.96 billion. –TMR