Indopura Resources, a joint venture between companies from Indonesia, Singapore, and China, started the construction of its $500 million chemical grade alumina plant in Kubu, West Kalimantan, in an attempt to tap rich bauxite resources in the region.

Indonesia is seeking to reap more added value from its rich mineral resources, with a planned mineral ore export ban starting Jan. 14.

The government issued a ministerial decree banning exports of some raw minerals — including bauxite — that would require the country’s miners to process their mineral ore before exporting.

"We are committed to investing in bauxite refinery in West Kalimantan, which has bauxite deposits of about 4.3 billion tons,” M. Arief Winata, Indopura’s managing director told reporters in a ground-breaking ceremony on Wednesday.

Arief said the plant would sit on 224 hectares of land and be online by the end of 2017: “We will process the bauxite so that it can have an added value to Indonesia’s economy and provide 1,500 jobs.”

He added that the plant would be able to produce 1.2 million metric tons of CGA per year.

CGA is used in the production of refractories, abrasives, building materials, integrated circuit packaging and materials for liquid crystal displays.

The ore bauxite for Indopura’s plant will be supplied from a 27,000-hectare mining area owned by Laman Mining, in Ketapang, West Kalimantan.

Arief said the company had designed and planned the plant’s construction for about a year, including conducting a feasibility study. For engineering, procurement, and construction of the plant, Indopura is working with Northern Heavy Industries Group, China State Construction Engineering Corporation, Zhongtai Construction Group and the Northeastern University Engineering and Research Institute.

Aneka Tambang, Indopura’s joint state mining company, is completing its first CGA plant in Taya, West Kalimantan, and will start production in April next year.

Antam has been building the plant since June 2011 and it is intended to process the company’s bauxite reserves to produce up to 295,000 tons of CGA per year.

The Indonesian government announced the policy to tighten its grip exports of ore minerals ostensibly to increase the value of its natural resources by processing them locally. Mining accounted for only 12 percent of the country’s gross domestic product in 2011.