The company currently imports its alumina needs - around 500,000 tonnes per year - to produce about 250,000 tonnes of aluminium, Ratih Amri, director of Inalum, told reporters at a mining conference.

"As soon as the smelter grade alumina plant is finished, it will replace the imports because we are building this with 1-million-tonnes-per-year capacity," she said, adding that the excess alumina will potentially be exported.

Meanwhile, Inalum signed an agreement with state energy company PT Pertamina to jointly develop a plant to produce calcined petroleum coke (CPC), a material used in aluminium smelting, she said.

The CPC plant is also expected to start operations by 2022.

(Reporting by Bernadette Christina Munthe, Wilda Asmarini, Writing by Fransiska Nangoy, Editing by Sherry Jacob-Phillips)