SEOUL / BALI, November 13, 2022 – Hyundai Motor Company and PT Adaro Minerals Indonesia, Tbk. (AMI) today signed a Memorandum of Understanding (MoU) to secure a stable aluminum supply amid the growing demand for aluminum for automobile manufacturing. This cooperation is also to establish a comprehensive cooperative system regarding the production and supply of aluminum by AMI through its subsidiary PT Kalimantan Aluminium Industry (KAI), that would be beneficial for both parties.
The MoU signing ceremony took place during the B20 Summit at Bali Nusa Dua Convention Center in Indonesia, with Jaehoon Chang, President and CEO of Hyundai Motor Company and Garibaldi Thohir, President Commissioner of PT Adaro Minerals Indonesia, Tbk., participating.
The B20 is the official G20 engagement group representing the global business community with a mandate to deliver actionable policy recommendations on the priorities established by each presidency to spur economic growth and development. This year’s B20 Summit embraces the theme of ‘Advancing Innovative, Inclusive and Collaborative Growth’ in support of the G20 theme ‘Recover Together, Recover Stronger’. The collaboration between Hyundai Motor Company and PT Adaro Minerals Indonesia, Tbk. marks the company’s commitment to accelerating the transition to sustainable energy, especially carbon neutralization.
Aluminum in Indonesia, which is rich in natural resources and energy, is considered to have future competitiveness. Indonesia’s green aluminum is classified as low-carbon aluminum using hydroelectric power generation, which is an eco-friendly power source and is expected to supply aluminum that meets HMC’s carbon neutralization policy amid the growing demand for aluminum in global automakers. In addition, supply and demand became unstable due to unpredictable situational variables which led to an increase in energy prices for aluminum production.
“Hyundai Motor Company has started operating a manufacturing plant in Indonesia and is also actively cooperating with Indonesia in various areas, where it can exert synergy in the future automobile industry, such as investing in battery cell manufacturing joint ventures,” said Youngtack Lee, Senior Vice President and Head of Hyundai Motor Asia Pacific Headquarter. “This cooperation with the aluminum smelter is also expected to strengthen the relationship between Hyundai Motor Company and Indonesia with stronger synergy.”
Items of cooperation in this MoU include the production and supply of aluminum produced by KAI, Hyundai Motor’s right to purchase aluminum produced by KAI at an early stage, and then the first negotiation right to purchase low-carbon aluminum produced by KAI in the future (with undetermined offtake volume in the range of 50,000-100,000 TPA).
Christian Ariano Rachmat, President Director of PT Adaro Minerals Indonesia Tbk, said, “This cooperation shows investor’s confidence on Indonesian mineral downstream processing in the world’s largest green industrial park in North Kalimantan. With the support from all our stakeholders and Hyundai Motor Company who has the track record, experience, and cutting-edge technology on electric vehicles, we hope to achieve Commercial Operation Date (COD) by the first quarter of 2025 and produce 500,000 TPA aluminum in initial stage.”
PT Kalimantan Aluminum Industry (KAI) is a limited liability company where PT Adaro Indo Aluminum (AIA) holds a majority of its interest, and PT Adaro Indo aluminum (AIA) is also a limited liability company whose majority interest are held by PT Adaro Minerals Indonesia, Tbk. (AMI). Based on cooperation in the production of cars, battery cells, and aluminum in Indonesia, Hyundai Motor Company will continue to discover areas of cooperation to secure future leadership of eco-friendly automobiles in Indonesia.