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T International Nickel Indonesia (Inco), now known as PT Vale Indonesia, started operating the Karebbe hydropower plant on Tuesday with an output of 130 megawatts (MW).

Located within Inco’s mining area in Sorowako, East Luwu regency, South Sulawesi, the nickel producer will only use 90 MW from its third hydropower plant.

Inco has two other hydropower plants in Larona and Balambana with a combined output of 365 MW.

Vale CEO Murillo Ferreira said operating the hydropower plants, built for US$410 million, would ensure the company’s future production sustainability, and its presence is expected to provide a clean source of power in the region.

He added that Vale, as the biggest shareholder in Inco, was committed to developing and increasing nickel production. He expected that production would increase from 73,000 metric tons to 120,000 metric tons over the next five years.

“We plan to increase production from 73,000 to 120,000 metric tons over the next five years, so the presence of the Karebbe hydropower plant, with an output of 90 MW, will ensure sustainable production in the future,” Ferreira said.

To reach the production target, Vale will invest $2 billion, which will be used to install a furnace and upgrade two other furnaces, build a refining plant in Bakodopi, Southeast Sulawesi, improve supporting infrastructure and human resources and exploit other minerals within Inco’s mining concession area such as copper, coal, bauxite and phosphate.

“Inco has been operating here for 43 years and has invested a total of $2.5 billion, but that amount is still not enough, so Vale will invest another $2 billion for the next five years to achieve our commitment in developing the company. We will also invite other shareholders to invest more money,” said Ferreira.

He acknowledged that he was interested in investing in Indonesia because the country had an abundance of natural and human resources for sustainable production in the future.

He added that 3 MW from Karebbe will be given for free to residents in East Luwu through state electricity firm PT PLN. Those 3 MW are expected to meet the power demands of around 2,500 households.

Earlier, Inco president director Nicolaas D. Kanter said Inco had also provided 5 MW from two of its hydropower plants to PLN to be distributed to residents. “So, the total output that we have provided for free to residents is 8 MW,” he said.

However, East Luwu regent Andi Hatta Marakarma, who attended the operational launch of the Karebbe hydropower plant, said residents had not benefitted from the power provided by Inco, as they still had to pay PLN the same electricity rates as other residents.