The Jakarta Post
Publicly listed nickel miner PT Vale Indonesia (INCO), a local subsidiary of Brazilian mining giant Vale SA, has allocated nearly US$90 million in capital expenditure to finance its operation this year, including to upgrade its nickel smelter.
Vale chief financial officer Febriany Eddy said that the firm saw the urgency to rejuvenate its smelter in Sorowako, South Sulawesi, as it had been in operation for nearly 40 years.
“The funds will be sourced from our own cash flow. So, let’s hope that the nickel price will climb this year,” he said after the annual shareholders’ meeting in Jakarta on Monday.
Vale’s profit plunged by 96.2 percent to only $1.9 million in 2016 from a year earlier as the global nickel price dropped by 22 percent last year.
Meanwhile, its revenue plummeted by 26 percent on an annual basis to $584.14 million despite its ability to cut its cost of revenue by 18 percent to $550 million.
The firm plans to maintain various internal efficiency measures this year to anticipate nickel price volatility, including a coal conversion project to replace high sulfur fuel oil (HSFO) with pulverized coal in its dryers.
(Read also: Vale’s profits plunge amid low nickel price)
HSFO has been primarily used to feed the company’s processing plant, accounting for 63 percent of its fuel costs last year.
The coal conversion project in one of its five kilns cut Vale’s HSFO consumption by 180,000 barrels to 1.6 million barrels last year. It plans to carry out such conversion in another kiln this year. (lnd)