C

entral Sulawesi Governor Longki Djanggola has officially launched the construction of a Rp 5.5 trillion (US$412 million) nickel smelting plant in Gandaganda subdistrict, Petasia district, North Morowali regency, Central Sulawesi.

The smelting project, which occupies a 25 hectare area is being jointly developed by PT Central Omega Resources (COR) Industri Indonesia and Chinese Marconing Group.

President director of PT COR Industri Indonesia Darwanto Bangun said the smelter would have an annual capacity of 300,000 tons of nickel pig iron (npi), a low grade ferronickel invented in China as a cheaper alternative to pure nickel for the production of stainless steel.

The development, he said, would be conducted in three phases, which were scheduled to be completed by the first semester of 2017.

'€œEach smelter will come with a power generator with a capacity of 15 megawatts,'€ Darwanto said.

The first phase smelter, he continued, would have a capacity of 100,000 tons of npi and would be worth Rp 2 trillion. This smelter is expected to be finished by the end of 2015.

The second phase smelter, also with a 100,000 ton capacity per year and a value of Rp 2 trillion, is scheduled to start operations by the second semester of 2016.

The third phase smelter of the same capacity and a value of Rp 1.5 trillion is expected to start operation by the first semester of 2017.

Darwanto said that 90 percent of the npi products from the factories would be exported to China and the remaining 10 percent would be sold for domestic industrial need.

The factories, according to Darwanto, were projected to absorb some 2,500 workers and would give priority to local manpower from North Morowali regency.

Separately Longki Djanggola conveyed his appreciation to PT COR Indusri Indonesia for realizing its investment in the province.

He said the factories would give a significant added value to both the provincial and national economy, especially after the central government banned the export of nickel ore since Jan. 12, 2014.

'€œThe operation of these factories will for sure increase the people'€™s income and move the wheels of both the provincial and national economy such that the administration can speed up an increase in the people'€™s wealth,'€ Longki said.

He also reminded PT COR as well as other holders of mining business licenses (IUP) in the region to seriously reclaim their respective former mining sites so as not to damage the environment.

Another a joint venture between Indonesian and Chinese companies, Huadi Nickel-Alloy Indonesia, is also building a smelter in Bantaeng, South Sulawesi, which is slated to be the area'€™s first nickel-processing facility.

The smelter, which may cost a total of $130 million by the final phase of development, will initially produce 50,000 tons of ferronickel each year, Huadi Nickel director Jos Stefan Hideky told The Jakarta Post earlier.

'€œTo support our operation, we will source the raw material '€” nickel ore '€” from our own mine in Southeast Sulawesi,'€ he said after signing a power purchase agreement with power firm PT Bantaeng Sigma Energi in January.

The smelter'€™s output would be sent to the firm'€™s affiliate in China, Jos revealed.

Huadi Nickel is a joint venture between Shanghai Huadi Industrial Co. of China and local firm PT Duta Nikel Sulawesi.

The smelter is set to occupy an area of 1,000 hectares in a 3,000-ha plot provided by the local administration for the establishment of Bantaeng Industrial Park, planned to become Indonesia'€™s first integrated iron-and-steel industrial estate.