India's National Aluminium Company Ltd (Nalco) signed an agreement here today for setting up a half-a-million tonnes per annum aluminium smelter and a 1,250-MW coal-based power plant in Indonesia's East Kalimantan province at an investment of $4.5 billion.
A Memorandum of Understanding (MoU) in this regard was initialled here by Nalco Executive Director P K Mohaptra and the Governor of East Kalimantan, Awang Faroek Ishak.
The MoU was signed in the presence of visiting Indian Commerce and Industry Minister Anand Sharma and Indonesian Minister of Trade Mari Elka Pangestu. Sharma, accompanied by senior officials, is leading a delegation of industry body CII to Indonesia.
The investment by the Indian state-owned aluminium giant will be deployed through a Nalco-led joint venture, in which it will have a majority 75% equity. The remaining equity in the JV will be held by a local coal mining firm.
The aluminium raw material for the project, to be completed in four years, will be sourced from Nalco's operations in India, while five million tonnes of coal per annum will be procured from local mines, Indian official sources said. "The project would be near the coal pitheads...," an official said.
Indonesia has attracted a lot of investment from Indian corporates, especially in its coal reserves. All the big business houses like the Tatas, Anil Dhirubhai Ambani Group and Adani Group have invested in Indonesian coal mines.
Reflecting the mood, Sharma said, "India wants to give more depth to our relations with Indonesia."
He said the two countries can do much more in the changing world. Sharma, who held a number of bilateral meetings with Indonesian key ministers, said Indian business houses have invested US 20 billion in sectors like steel, power and coal in Indonesia.
