Indonesia and China have agreed to jointly produce alumina, a raw material in the form of aluminum ingot for upstream aluminum industry, Indonesian Ambassador to China Imron Cotan said.
According to antaranews.com PT Indonusa Dwitama and Chalco Hongkong Limited signed the memorandum of understanding on the cooperation in the presence of the ambassador here on Thursday night.
With the agreement, the Aluminum Corp of China Ltd (Chalco) Hongkong will invest US$1.1 billion to build a metal processing and purification smelter, alumina grade, in West Kalimantan.
The ambassador who witnessed the signing of the MoU said that the deal was a concrete form of the increasingly good cooperation between the two countries in the field of investment.
"Indonesia with its stable government and an average economic growth of six to seven percent is a conducive place for would-be investors, including investors from China," Imron said.
He said the cooperation is part of the realization of the strategic partnership cooperation of the two countries signed in 2005. "We hope the signing of the MoU would further strengthen and expand the good relations of both nations."
Chinese Ambassador to Indonesia Liu Jianchao who also witnessed the signing of the MoU said Indonesia was one of the biggest destinations of the Chinese investors, after the United States and Europe experienced economic crisis.
"If Indonesia happens to be the fourth largest destination for Chinese investment, its positive development in the past several years could make it the second biggest destination for Chinese investment ahead," the Chinese ambassador said.
President of Chalco Hongkong Limited Luo Jianchuan said his firm was committed to supporting the strategic partnership of the two governments, particularly in the investment sector.
"With this cooperation, we hope we can help boost Indonesia`s economic growth. We have no doubts to invest our capital in Indonesia," he said.
Chalco Hongkong Limited is one of the biggest aluminum producer in China. So far China is the biggest aluminum producer and at the same time the biggest consumer in the world, namely about 40 percent of the world market.
Up to the end of 2011, China is the biggest aluminum importer. The ministry of industry recorded that Indonesia has supplied 25.42 million tons of bauxite to China.