Jakarta. Listed miner Vale Indonesia, one of the country's largest nickel producers, said on Tuesday it had signed an investment agreement with China's Shandong Xinhai Technology, a unit of Baowu Steel Group, to develop a ferronickel processing plant in Sulawesi.
The plant would cost around $2.1 billion and have the capacity to produce ferronickel with 73,000 to 80,000 tons of nickel content a year at Bahodopi in Morowali, Central Sulawesi.
Febriany Eddy, Vale Indonesia's chief executive officer (CEO), expected the new plant construction would finish in 2025 at the latest.
Under the agreement, Vale and Shandong Xinhai would establish a new joint venture (JV) with the former controlling 49 percent, Bernardus Irmanto, the Vale Indonesia's finance director, said. Taiyuan Iron & Steel (Tisco), a Shandong Xinhai's and Baowu's subsidiary, would together control the reminder 51 percent.
He noted that the partners were also discussing the possibility of adding a stainless steel plant in the future.
Wang Wenlong, Shandong Xinhai chairman, said the Bahodopi project would be Indonesia's first nickel plant to be powered by liquefied natural gas.
In Pomalaa, another area on Sulawesi Island, Vale and its partners are developing a plant to produce 120,000 tonnes per year of mixed hydroxide deposits, a material extracted from nickel ore to be used in batteries for electric vehicles (EVs).
Vale Indonesia controls the Sorowako mine, Indonesia's largest nickel mine, located in South Sulawesi. The mine produced 71.600 metric tons of nickel in 2020, according to the GlobalData mining database. Vale Indonesia said with the installed facility today, the mine could operate until 2045.