Jakarta. Indonesian conglomerate Harita Group held a groundbreaking ceremony on Thursday on the construction of the $320 million nickel smelter in Obi Island, South Halmahera district, North Maluku province.

In a statement sent to media on Friday, the group — through its unit Megah Surya Pertiwi — will effectively start construction in the middle of this year and will complete it in 24 months, pushing back the original schedule.

Senior general manager of Harita Nikel, Arif Perdanakusumah, said the smelter would use the latest ore-processing technology called Rotary Klin Submerged Arc Furnace (RK-SAF), which consists of three lines and needs to be powered by 120 megawatts.

"For sufficient electricity supply, the company will build three units of power plants each with a capacity of 40 megawatts," he said in the statement.

Megah Surya Pertiwi is a joint venture between Harita and its partners, Chinese state-owned enterprise XinXing Qiyun Investment and Corsa Investments.

Arif said that the smelter will produce 190,000 metric tons of ferronickel per year. With such capacity, the smelter will not only process nickel ore from the mining companies affiliated with Harita, but also can receive supplies from other companies holding nickel mining permit in South Halmahera and surrounding area through beneficial business relations.

North Maluku Governor Abdul Ghani Kasuba, South Halmahera district chief Muhammad Kasuba, Megah Surya Pertiwi's president director Donald Hermanus, executive director of Harita Nickel Lim Hok Seng and a representative from XinXing attended the groundbreaking ceremony.

Arif said in the statement that the company hoped that the smelter will boost new economic development in South Halmahera, especially on Obi Island.

"We hope the smelter can give a benefit for local and national citizens through tax and non tax payments, employments and people's development program," he said in the statement.

Harita owns 26 mining permits covering more than 350,000 hectares in West Kalimantan. It has also diversified into nickel, palm oil and shipping.

GlobeAsia