National Aluminium Co (NALCO) and RAK Minerals and Metals Investment (RMMI), promoted by the Ras Al Khaimah Investment Authority, UAE, plan to jointly build Rs14,000 crore project in Indonesia.
RMMI is a joint venture between the Ras Al Khaimah Investment Authority (RAKIA) and Trimex International with existing investments and operations in Indonesian coal mines.The UAE firm will acquire a 24-per cent equity stake in Nalco's new aluminium smelter plant in Indonesia, for which it had signed an agreement with the Indonesian government in early January 2008.
Under the agreement NALCO and RMMI will set up a 500,000-tonne smelter and a 1,250 MW captive power plant in South Sumatra province at an investment of Rs14,000 crore.
The aluminium smelter will require a feedstock of 1 million tonnes of alumina and is scheduled to be completed in 2013.
RMMI manage the construction schedules of ports and rail corridor Leaving Nalco free to focus on the smelter and power plant.
NALCO said it would leverage on RMMI's existing coal mine operations and infrastructure, provide the coal energy for the plant and manage the logistics needed for the operations of the proposed aluminium smelter.
Under the MoU, RMMI will provide five million tonnes per annum (mtpa) of low sulphur thermal coal to manage the energy needs of the aluminium smelter.
"The schedules of construction of port and rail corridor by RMMI on the one hand and of the smelter and power plant by NALCO on other would be synergised more efficiently through the joint venture," said Bajrang Bagra, Nalco's finance director.
The smelter will be managed by PT Nalco International, wholly-owned by Nalco, where Nalco will retain the majority equity stake of 76 per cent, with management control.
"Through this joint venture, RMMI will be able to expand its mining capacity in Indonesia, and increase the much needed supply chain infrastructure surrounding our current operations in South Sumatra. This smelter will also complement the smelting and metal based fabrication industries that have been proposed under our MoU with the Government of South Sumatra," said Madhu Koneru, Managing Director of RMMI.
While operations of the proposed smelter would leverage on RMMI's transport infrastructures in South Sumatra, the MoU also envisages actively scouting for other viable locations in Indonesia. This joint venture is aimed to create synergic value for the two companies and will enhance commitment to the project.
RMMI is an initiative by Ras Al Khaimah Investment Authority (RAKIA), the nodal agency that oversees investment activities in the Emirate of Ras Al Khaimah, UAE.
The launch of RMMI after the RAK Government integrated the industrial minerals and metals strategy to become a world-leading industrial hub.
RMMI was founded to cater to the growing demand for industrial minerals and metal resources for various industries and to identify opportunities in emerging markets such as Africa, Eastern Europe and the Far East. The investment potential for RMMI in these markets is estimated to be around $1 billion in 2008.