Press Metal acquiring 80% stake in PT Kalimantan Alumina Nusantara for RM1.04bil

KUALA LUMPUR: Press Metal Aluminium Holdings Bhd (PMAH) has entered into a shareholders’ agreement and a share subscription agreement for 80 per cent equity interest in PT Kalimantan Alumina Nusantara (KAN) for RM1.04 billion.

In a Bursa Malaysia filing, PMAH, the largest Aluminium smelter in Southeast Asia, said the agreements were signed with PT Alakasa Alumina Refineri (AAR) and PT Dinamika Sejahtera Mandiri (DSM).

It said PMAH would hold an 80 per cent stake in KAN while AAR and DSM would hold 19.77 per cent and 0.23 per cent, respectively.

"This is to set up a strategic joint venture where KAN will establish and operate an integrated alumina refinery plant, power plant, jetty and supporting infrastructure in Sanggau, West Kalimantan, Indonesia.

"The refinery is expected to have an annual production capacity of 1 to 1.2 million metric tonnes (Phase 1), with a potential expansion to double this output. The total cost for Phase 1 is US$750 million (equivalent to RM3.24 billion),” it said.

PMAH group chief executive officer Tan Sri Paul Koon said the venture aligns with their strategy to reinforce and continuously strengthen its leading position as the largest smelter in Southeast Asia and boost its competitive edge across the aluminium value chain.

"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.

"It is an effective approach towards expanding our upstream presence while ensuring higher self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations,” he said.

Koon noted that the collaboration will also reduce the company’s 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. - Bernama