Vale Indonesia's nickel processing facility in Sorowako, South Sulawesi. (GA Photo/Mohammad Defrizal)

Vale Courts Chinese Investors for New Bahodopi Smelter


MARCH 29, 2017

Jakarta. Vale Indonesia, one of the country's largest nickel producers, is wooing unnamed Chinese investors to take on its new smelter project in Bahodopi in Central Sulawesi.

The company will commence a pre-feasibility study for the project in September, Nico Kanter, the president director of Vale Indonesia said recently.

"We're going to explore a possibility to build a ferronickel smelter in Bahodopi," he said. Ferronickel contains around 65 percent of iron and 35 percent of nickel, and is used as a raw material for steel.

Indonesia used to export raw nickel ores, mainly to feed China's smelter and steel industry. But since 2014, the government requires the material to be processed locally.

The project is part of Vale Indonesia's smelter expansion.

This year it also allocates $90 million to build a smelter in Sorowako, South Sulawesi.

Vale Indonesia is also working with Japan's Sumitomo Metal Mining to build another smelter in Pomalaa, Southeast Sulawesi. However, the project is currently on hold as the company has yet to clear environmental impact and forestry use assessments, Nico said.

Vale Indonesia posted $1.9 million in net income last year, down from $50.5 million in 2015 as revenue dropped amid weakening prices of nickel.