Indonesia pushes coal-fueled aluminum plants as Iran war disrupts global supply

Disruptions from the Iran war have reduced Middle Eastern aluminum output, pushing global prices higher and opening a market gap that Indonesia aims to fill. By 2030 the nation intends to raise alumina production to 32.5 million metric tons and grow aluminum output from about 1 million tons in 2025 to 14.5 million tons, largely powered by off-grid coal-fired smelters. Around 75 % of the planned facilities are financed by Chinese investors, whose total stake could reach $30 billion by 2030.

Environmental groups note that these “captive coal” plants are largely untracked and conflict with Indonesia’s pledge to curb coal use, risking increased greenhouse-gas emissions and local haze. The aluminum sector already accounts for roughly 2 % of global emissions, and the rapid expansion could deplete domestic bauxite reserves within a decade. Officials stress speed to capture the market opportunity, while NGOs warn of severe community impacts.