Vale, Two Chinese Companies Build USD2.1 Billion Nickel Smelter in Sulawesi

TheIndonesia.id - PT Vale Indonesia Tbk (INCO) is collaborating with companies from China, namely China Baowu Steel Group and Shandong Xinhai Technology to build a nickel refining and processing plant or smelter in Bahodopi District, Morowali Regency, Central Sulawesi. This project has an investment value of US$2.1 billion or around Rp31 trillion.

"The estimated Capex cost is around US$2.1 billion for the construction of the factory," said PT Vale Indonesia President Director Febriany Eddy at the signing of the Bahadopi Block Project Cooperation and Investment Agreement, reported by Antara in Jakarta, Tuesday, September 6, 2022.

The nickel smelter plant will produce around 73 thousand to 80 thousand metric tons of nickel per year. Vale hopes that the construction of the factory will be completed by 2025 at the latest.

Eddy thanked the Indonesian government for making the Bahodapi Project a National Strategic Project (PSN). "This project is included as PSN, this means that this project has a strategic value of increasing, growing, equitable development to improve public health and regional development," she said.

The nickel smelter plant being built will produce low carbon by using liquefied natural gas or LNG power plants. Eddy said the plant will be the first factory in Indonesia to be powered by LNG.

PT Vale Indonesia Director Bernandus Irmanto said that Vale will own 49 percent of the factory, while the rest will be owned by partners. Irmanto explained that the factory will produce ferronickel products as raw materials for making stainless steel.

During the first five years, 100 percent of the ferronickel products will be taken by Vale's partners for export. Meanwhile, after five years, Vale gets 49 percent of the total ferronickel products produced by the factory in one year.