en.Wedoany.com Reported - The Centre for Research on Energy and Clean Air (CREA) released a report on July 2, 2026, warning that Indonesia's large-scale expansion plans for the alumina and aluminum industry could trigger a new wave of captive coal-fired power plant construction and accelerate the depletion of domestic bauxite reserves. The report predicts that Indonesia's alumina production capacity will surge from 9 million tons in 2025 to 32.5 million tons by 2030, while aluminum smelting capacity will jump from 1 million tons to 14 million tons over the same period.
CREA noted that with raw material demand expected to reach 65 million tons, Indonesia's proven bauxite reserves could be completely exhausted in approximately 12 years. Although most of Indonesia's bauxite reserves are located in areas with access to regional power grids or renewable energy potential, many proposed smelting projects still rely on off-grid captive coal-fired power plants. Captive power plants, built by companies to meet their own electricity needs, have grown rapidly in recent years alongside the downstream development of Indonesia's nickel industry, with the majority still powered by coal.
The Indonesian government has pledged to halt the construction of new coal-fired power plants, but captive power plants are exempt from this ban as long as they reduce carbon emissions by 35% within 10 years of operation. CREA analyst Katherine Hasan warned that if all planned aluminum projects are completed, Indonesia could once again see a captive coal-fired power plant construction boom similar to that in the nickel industry. She stated: "If all planned capacity is implemented, the downstream development of the aluminum industry could trigger a new wave of industrial captive coal-fired power plant construction. This would hinder the country's decarbonization goals, lock industrial growth into a high-carbon pathway, and exacerbate impacts on the environment and public health."
Regarding raw material supply, CREA analyst Syahdiva Moezbar emphasized that disorderly expansion could create new vulnerabilities in mineral resource security and energy supply. CREA urged the Indonesian government to ensure that all downstream projects are developed transparently, based on realistic assessments of bauxite reserves and supply, and to formulate energy supply plans that minimize reliance on fossil fuel power generation. The organization believes these measures are crucial for the sustainable development of the aluminum industry while also supporting Indonesia's energy transition and decarbonization goals.
Previously, Indonesia's state-owned aluminum company PT Inalum has repeatedly warned about the risks of capacity expansion. The company noted that if all existing reserve projects are realized, Indonesia's aluminum production capacity would triple, potentially depleting domestic bauxite resources within 10 years, leading the industry into a dilemma of "resource depletion plus import dependence." The Indonesian Mining Experts Association (PERHAPI) estimates bauxite resources at 6.2 billion tons and reserves at 3.2 billion tons, but Inalum's plans are not based on current demand. Once all projects are operational, reserve life will be significantly shortened.
