EGA and INALUM sign agreement on potential use of UAE technology and investment in brownfield aluminium smelter expansion in Indonesia
United Arab Emirates, 16 November 2022: Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas, and PT Indonesia Asahan Aluminium (Persero) (INALUM) have signed an agreement granting EGA the exclusive right to licence its UAE-developed technology to INALUM for the Indonesian company’s brownfield aluminium smelter expansion, and giving EGA the right to invest in the project and offtake metal.
The agreement was signed by Abdulnasser Bin Kalban, Chief Executive Officer of EGA, and Hendi Prio Santoso, President Director of INALUM at the G20 Summit in Bali, Indonesia. The signing was witnessed by His Excellency Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, His Excellency Pahala Mansury, Deputy Minister for State-owned Enterprises of Indonesia, and His Excellency Husin Bagis, Ambassador of the Republic of Indonesia to the UAE.
Under the agreement, EGA will have the exclusive right to licence its DX+ Ultra smelting technology to INALUM, the company’s latest industrialised technology, on a commercial basis for the brownfield expansion of the Kuala Tanjung smelter in North Sumatra, should the project prove feasible. EGA has developed its own smelting technology in the UAE for more than 30 years, and was the first UAE industrial company to license its core process technology internationally in a deal with Aluminium Bahrain in 2016.
EGA also has the right to take a minority equity stake in the project, and to offtake much of the produced metal. EGA’s requirement for an investment or metal offtake is that the project uses renewable power. The existing aluminium Kuala Tanjung smelter uses electricity generated with hydropower.
The expansion project is expected to have a capacity of more than 400 thousand tonnes of aluminium per year, depending on the outcome of a bankable feasibility study which will now be jointly funded by EGA and INALUM.
Abdulnasser Bin Kalban, Chief Executive Officer of EGA, said: “This agreement is an important step forward in our cooperation with INALUM, and brings closer the deployment of our UAE-developed technology in Indonesia. A potential investment in the Kuala Tanjung brownfield expansion, and the offtake of metal, would progress our growth in low carbon aluminium that will make modern life possible around the world while protecting our planet for future generations. I thank INALUM for their continuing trust in EGA in line with the partnership between our two countries.”
Hendi Prio Santoso, President Director of INALUM, said: “This agreement confirms that EGA is our chosen partner for the brownfield expansion of Kuala Tanjung, based on the efficiency of EGA’s smelting technology and experience transferring it internationally, and the company’s potential partnership as an investor and metal offtaker. We look forward to the successful conclusion of the bankable feasibility study as the next step before we begin construction.”
EGA and INALUM are already working together on the potential upgrade using EGA technological know-how of the existing aluminium smelter at Kuala Tanjung, under an agreement signed in 2020. The project aims to boost production from the existing reduction cells by around 20,000 tonnes per year or approximately 10 per cent. Design work for a pilot section of the project has been completed.
EGA has completed a series of similar upgrades across its sites in Jebel Ali and Al Taweelah over recent decades.
In 2020, EGA signed an agreement with NEO Aluminio Colombia which could lead to the export of EGA technology for the development of the South American country’s first aluminium production facility.