REPUBLIKA.CO.ID, JAKARTA - Russia's industrial group Vi Holding will invest 500 million USD in an alumina refinery in Indonesia that could be built in the next three to four years, according to Russian Trade Minister Denis Manturov on Tuesday.

Southeast Asia's biggest economy introduced a controversial mineral ore export ban in January, aimed at forcing miners to move up the value chain by processing minerals in Indonesia. The halting of 3 billion USD of annual nickel ore and bauxite exports lifted the price of nickel and helped support aluminium, boosting the fortunes of Russia's United Company Rusal and Norilsk Nickel.

The new alumina plant is expected to have a capacity of 1 million tonnes per year with shipments bound for China, said Manturov, after meeting with new Indonesian President Joko Widodo in Jakarta.

"In Indonesia, they (Vi Holding) will have a project for producing alumina, which will be exported to their industry in China," said Manturov. "Total investment in China is 3 billion USD and specific for Indonesia, their investment will be approximately 500 million USD."

The Indonesian alumina project will use Russian technology and is estimated to be completed within three or four years with annual production of about 1 million tonnes, added Manturov. Vi Holding's investment follows on from aluminium giant United Company Rusal, who in February said it wanted to make Indonesia a regional hub for its alumina production. 

Russia ranks number 14 among Indonesia's top import markets, according to Indonesian trade ministry data, with total trade between the two countries worth 1.3 billion USD from January to July this year.

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