Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Chinese stainless steel and nickel manufacturer Tsingshan Holding Group plans to set up aluminum operations in Indonesia in a diversification effort. 


According to media reports, the company is planning to set up a 1mn mt per year aluminum smelter in Sulawesi, Indonesia in partnership with Huafon Group. In Phase 1, the smelter will have a 500,000mt annual capacity by 2023. The company has not disclosed further production schedules. 


Tsingshan will use inexpensive coal power for this smelter. The environmental curbs in China are one of the main reasons firms are looking to move capacity abroad. Also, the Indonesian government plans to ban the export of bauxite, like nickel ore, which will leave more resources in the domestic market. 


One of the largest producers, China Hongqiao, has also set up an alumina refinery on the island. Prior to this, Tsingshan was also about to set up a $2.8bn copper smelter in Weda Bay, Indonesia but could not do so, due to pricing disagreements. 

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