Industry Minister MS Hidayat said he was confident that the Chemical Grade Alumina project would make Indonesia the world's second largest alumina producer, especially as the government will also take over alumina producer PT Inalum from Japan in 2013.

“Three years from now we'll no longer be an alumina importer,” Hidayat said after the ceremony marking the start of the factory’s construction.

The factory will be run by PT Indonesia Chemical Alumina, in which 80% of the stake belongs to state-owned mining company PT Aneka Tambang and 20% by its Japanese partner PT Showa Denko.

Located in Tayan in West Kalimantan, the factory is set to have a production capacity of 300kt/y of alumina.

The factory’s construction is scheduled to be completed within 32 months, with $450M allocated for the project.