($1 = 14,695.0000 rupiah) (Reporting by Chen Aizhu in Singapore and Fransiska Nangoy in Jakarta; editing by Christian Schmollinger)
aizhu.chen.reuters.com@reuters.net)) By Chen Aizhu and Fransiska Nangoy
SINGAPORE/JAKARTA, May 15 (Reuters) - China's Shandong
Nanshan plans to expand its new Indonesian alumina plant to a $6
billion aluminium smelting complex by 2028, a company executive
said, which would be among the largest foreign investments in
the resource-rich nation.
Shandong Nanshan is among a growing group of
private Chinese companies making multi-billion-dollar
investments in Southeast Asia in sectors such as metal
processing and oil refining amid a cooling Chinese economy and
tighter regulatory scrutiny at home.
The company started up its 2 million tonnes per year (tpy)
alumina facility last November at the Galang Batang special
economic zone (SEZ) on the island of Bintan,located about one
hour by ferry from Singapore.
Now running at full capacity, Nanshan processes bauxite
mined from Indonesia's Kalimantan region and exports alumina to
neighbouring Malaysia and also sells to international traders.
Nanshan, with plans to bring more Chinese firms to the site,
intends to start building a 250,000-tpy aluminium smelting unit
later this year, part of a plan to construct a 1 million-tpy
aluminium plant by 2028, a company executive said last week,
asking to remain unidentified, eventually producing high-end
aluminium ingots for the aircraft and electric vehicle
industries.
Based in China's Shandong province, Nanshan Group says its
existing aluminium customers include Airbus, Boeing and Tesla.
To fuel the alumina facility, Nanshan operates a
160-megawatt (MW) coal-based power plant within the SEZ. The
site's general manager, Hao Weisong, said on Tuesday that the
company plans a 100-MW solar power facility and has also agreed
to buy renewable power from state utility Perusahaan Listrik
Negara.
The SEZ's operating company, PT Bintan Alumina Indonesia,
was last year granted a full waiver of income tax for 20 years,
Susiwijono Moegiarso, secretary general of the National Council
of Special Economic Zones, said on Friday.
He said investment at the site has thus far totalled 17
trillion rupiah ($1.16 billion).
Indonesian President Joko Widodo, who visited the site last
year, is focusing on minerals processing to extract more value
from its vast mining sector, and the government may impose an
export ban in June on unprocessed minerals, including bauxite.
Moegiarso said that the SEZ has committed to supplying 33.8%
of its power from renewable sources by 2032.
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