Indonesia’s primary aluminium supply has remained largely stagnant for decades. The Inalum-operated Asahan smelter, with a current capacity of ~250ktpa, has stood as Indonesia's sole primary aluminium production facility.
As such, in 2023, Indonesia is expected to have
produced ~250kt of primary aluminium and AME forecasts this to rise marginally
in 2024 as upgrades at Asahan are undertaken to increase operating amperage
rates. However, this is expected to drastically change in the near to medium
term. Long standing plans to expand Asahan finally appear to be gaining
traction and a flurry of greenfield developments have been announced.
Indonesia is likely to see the development of
aluminium production capacity driven broadly by government dictate. The June
2023 implementation of a ban on raw bauxite exports has seen the growth of
alumina refining capacity and any additional tightening of exports down the
value chain (i.e., of alumina) will drive the development of smelting capacity.
As seen in the nickel sector, Chinese companies,
deprived of ore and potentially alumina feed have started looking to develop
capacity in-country—and this comes with the added benefit of ‘offshoring’
emissions to Indonesia.