By Dominikus
PT Mahkota Karya Utama (MKU) has secured a long-term bauxite supply deal with Bintan Alumina Indonesia (BAI), a subsidiary of Nanshan Aluminium International Holdings Ltd. Under the Bauxite Supply Framework Agreement, signed on March 10, 2025, MKU and affiliated mining firms under the Santony Family will supply metallurgical-grade bauxite to BAI’s refinery, located at the Bintan Special Economic Zone (SEZ), Riau Islands Province, until at least 2027, with an option for a three-year extension
MKU, 99% owned by Mr. Santony, operates its own bauxite mines and supplies raw materials alongside other Santony-affiliated firms, including PT Bintangar Maju Abadi, PT Bintan Tayan Mineral, PT Solid Surya Sejahtera, and PT Bukit Batu Mulia. The agreement ensures a stable supply of bauxite as Indonesia’s bauxite export ban, implemented in June 2023, continues to drive domestic refining investments
Read also: Mahkota Karya secures long-term bauxite supply agreement with BAI
BAI is ramping up production capacity to 4 million tons of alumina per year by 2026, requiring a significant increase in bauxite procurement. The agreement includes annual purchase caps of up to US$120 million in FY2025, US$180 million in FY2026, and US$240 million in FY2027, reflecting growing demand. Each ton of alumina requires 2 to 3 tons of bauxite, aligning with BAI’s expansion timeline
The pricing model is linked to global alumina benchmarks, with periodic adjustments based on bauxite quality and market conditions. Logistics are integrated through BAI’s deep-water port, enhancing transport efficiency and cost savings.
This collaboration strengthens MKU’s position as a key bauxite supplier while securing BAI’s long-term raw material needs. As Indonesia's aluminium industry grows, the partnership reinforces both companies' roles in Southeast Asia’s aluminium supply chain.
Editing by Reiner Simanjuntak
