Hongqiao starts China's first overseas alumina production in Indonesia

China Hongqiao Group, the world's largest aluminium producer by capacity, formally commenced its 1 million tonne per annum alumina production line in Indonesia's Borneo on Saturday, in a bid to boost the production capacity cooperation between China and Indonesia.

The production line is part of the 2 million-tonne-a-year smelting plant with a total investment of 1 to 1.5 billion U.S. dollars which is operated by PT Well Harvest Winning Alumina Refinery, a joint venture which Hongqiao holds a 56 percent stake.

The factory, integrated with a self-produced power plant and seaport in West Kalimantan Province's Ketapang Regency, processes local bauxite into alumina, a material for production of aluminium.

Zhang Shiping, Hongqiao's president, said at the opening ceremony that the plant is Hongqiao and China's first overseas investment in alumina refining as well as the first alumina factory in Indonesia.

Sun Xiushun, president of Winning International Group, the shipping arm and shareholder of the joint venture, told Xinhua that the alumina will be mainly used to supply the raw material needs of Indonesian local smelters while the remaining will be exported to China, the Middle East and other regions.

Indonesia, the world's main nickel ore exporter and supplier of bauxite, banned raw ore export in early 2014 to encourage the building of smelters and shift exports from raw materials to higher-value products.

Hong Kong listed Hongqiao aims to produce 6 million tonnes of aluminium by the end of 2016, from 5.19 million tonnes last year. Hongqiao enjoys a much lower production costs than its rivals as it has its own power plants, in-house upstream materials and other production facilities.