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. Last Updated: 07/27/2016

Indonesia Trip May Be Worth $10Bln

President Vladimir Putin will visit Indonesia for the first time on Thursday, looking to open the way for billions of dollars of Russian investment in the country's oil and aluminum industries.

Discussions during the visit, which follows a trip to Moscow by Indonesian President Susilo Bambang Yudhoyono in December, could generate deals worth as much as $10 billion.

Putin will meet with Yudhoyono as well as a group of Indonesian businessmen on the one-day visit, Kremlin spokesman Dmitry Peskov said Monday.

Indonesian metals and mining major Aneka Tambang, or Antam, plans to sign a deal with United Company RusAl on Thursday for the construction of a $4 billion alumina smelter in Tayan, East Kalimantan, Indonesian Energy Minister Purnomo Yusgiantoro said Monday in Jakarta.

RusAl spokeswoman Olga Sanarova confirmed that talks were under way between the companies and that an agreement would be signed, although she could not provide financial details for the deal.

"We are interested in Indonesia due to its rich bauxite resources," Sanarova said. "We are studying opportunities for a project to create a bauxite processing plant in the country."

RusAl is the world's biggest aluminum producer.

The initial investment in the plant will be $2 billion, Purnomo said, Bloomberg reported. That figure will cover the construction of the smelter as well as the plant that will supply it with the necessary power, he said.

Antam, Indonesia's second-biggest nickel miner, first mentioned the prospect of the chemical-grade alumina project in Tayan last month.

Indonesia's proximity to China, one of the world's largest aluminum consumers, makes the prospective deal especially attractive.

In the oil sector, LUKoil may ink a deal with Indonesia's Pertamina, LUKoil spokesman Vladimir Simakov said Monday. "Yes, we are planning to enter into a cooperation agreement," Simakov said, although he declined to say how much the deal would be worth.

A subsidiary of the oil major, LUKoil Overseas, signed a memorandum of understanding with the Indonesian company in April to work together on the development of fields in Russia, Indonesia and third countries, he said. The new deal may identify specific projects based on research by a joint working group, he said.

LUKoil president Vagit Alekperov will be accompanying Putin on the trip, Simakov said.

The focus will not only be on resources, however, as an investment commitment in Indonesia's promising telecommunications sector may be in the works for Alfa Group's Altimo. Kirill Babayev, a spokesman for Altimo, said the company had been studying the country and planning to invest.

"The specific project has yet to be determined," he said.

Indonesia is an attractive market for telecoms firms because of its population of over 234 million people, solid economic growth and low cellular penetration, Babayev said. He added that Alfa Bank president Pyotr Aven and Altimo chief managing director Alexei Reznikov would also make the trip.

A number of other deals could also materialize during the visit, but Peskov said information about possible agreements was being kept under wraps until Wednesday.

The Sukhoi aircraft company may use the trip to firm up negotiations to sell Indonesia six new fighter jets worth a total of $300 million. The company signed a memorandum of understanding to supply the jets -- three Su-30 and three Su-27 aircraft -- at the MAKS air show outside Moscow last month. The memorandum of understanding followed an earlier $200 million deal for four Sukhoi jets, which have already been delivered. The first deal was signed in 2003.

Sukhoi's press service referred inquiries about the negotiations to chief spokesman Vadim Razumovsky, but he was out of the office and unavailable for comment Monday.

The newspaper Bisinis Indonesia reported Monday, without identifying the source of the information, that Alfa Bank might announce the acquisition of an Indonesian financial institution during the trip. Alfa Bank did not respond to a request for comment Monday.

The newspaper said the total value of the deals signed during the visit could reach $10 billion, citing Indonesian Chamber of Commerce official Didie Soewondho.

From Indonesia, Putin will head on to Australia to attend an Asian-Pacific Economic Cooperation summit and hold bilateral meetings, including one with U.S. President George W. Bush.

On the way back from Australia, on Sept. 10, Putin will stop over in the United Arab Emirates.