REPUBLIKA.CO.ID, JAKARTA -- The government and a Japanese consortium on Monday signed an agreement under which the government wholly takes over PT Indonesia Asahan Aluminium (Inalum), an aluminum smelter in North Sumatra.

The consortium Nippon Asahan Aluminium, which held the majority 58.9 percent shares of Inalum had been the operator of the smelter for 30 years since it started operation in Nov. 1983.

The assets of Inalum also include the Asahan hydro electric plant, which has a capacity of 640 megawatts.

The smelter has a designed production capacity of 225,000 tons of aluminum ingot per year.

The Japanese consortium has been keen on renewing its contract by offering a fresh investment of more than $300 million to expand the aluminum production capacity by 80,000 tons per year.

However, with pressure from observers and legislators, the government decided not to renew the contract that ended this year for the US$2 billion joint venture.

Inalum was set up in 1978 under a build, own and transfer contract with the consortium.

Ikuti Whatsapp Channel Republika