SDK to Start Joint F/S for Alumina Project in Indonesia

Apr. 5. 2006
SHOWA DENKO K.K.、Marubeni Corporation

Showa Denko K.K. (SDK) has reached agreement with PT. ANTAM Tbk of Indonesia, Straits Trading Amalgamated Resources Private Limited (STAR) of Singapore, and Marubeni Corporation of Japan on implementation of a joint feasibility study for a chemical-grade alumina plant in the Tayan district, West Kalimantan, Indonesia.

SDK is currently producing aluminum hydrate and alumina for chemicals at its Yokohama Plant and is selling the product mainly in the Japanese market.  These products are being produced from bauxite ore that contains approximately 50% by weight of alumina.  The bauxite residue, consisting mainly of iron oxide and silicon dioxide, is disposed of in the sea based on the domestic law.  SDK is planning to terminate the disposal of bauxite residue in the sea by 2015.

As the Tayan district has reserves of high-quality bauxite, the four parties will finalize the feasibility of producing 300,000 tons/year of chemical-grade alumina and aluminum hydrate based on the Tayan bauxite.

The parties will establish a joint venture company in or around July this year to conduct a joint feasibility study of the project.  The company will conclude the study by the end of this year, determining the amount of required investment and ways of financing while carrying out an environmental assessment.  Based on the results of the study, the parties will make a final decision on the implementation of the project.

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