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View all search resultsChina-backed $3b nickel smelter starts up in Morowali
The smelter produces 1.8 million tons of ferronickel a year.
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T Gunbuster Nickel Industry (GNI), a subsidiary of China-backed nickel smelting company PT Virtue Dragon Nickel Industry, has begun operating a new nickel smelter in Morowali, Central Sulawesi, expanding the parent company's operations.
President Joko “Jokowi” Widodo inaugurated the new smelter, worth Rp 42.9 trillion (US$3.01 billion), on Monday.
The smelter will process nickel ore into ferronickel, which is a key ingredient in stainless steel. With a production capacity of 1.8 million tons per year, the smelter will require roughly 21.6 million wet metric tons (wmt) of nickel ore annually.
“I appreciate the construction of the smelter by PT Gunbuster Nickel Industry. This will provide a lot of added value by processing nickel ore into ferronickel — 14 times the value,” Jokowi said at a live broadcast inauguration ceremony in Konawe, Central Sulawesi.
He added that GNI employed 27,000 people in total, and he instructed the provincial governor and regents – who also attended the ceremony – to "make these companies and investors feel safe enough to do their businesses".
Many companies began developing nickel smelters in Indonesia after the government banned nickel ore exports in January last year in a bid to bolster industrialization. The government has plans to expand the ban to cover semi-processed nickel.
Read also: Indonesia to formulate grand strategy for nickel industry
GNI president director Wisma Bharuna reiterated the company's commitment to creating employment and developing downstream mining industries and technology transfers.
"So, no more [raw material] will go abroad. Everything will be used by us; it will be our products and that will bring prosperity for all," he said.
GNI's smelter currently runs on 24 lines of production that use rotary kiln electric furnace (REKF) technology but plans to expand capacity to 52 lines.
The government expects stainless steel exports to reach $20.8 billion in 2021, which is a huge leap from the $1 billion to 2 billion generated by exporting raw materials, added Jokowi.
Processing raw materials into finished products was also expected to boost nontax revenue from the mining industry from an average of Rp 40 trillion per year to Rp 1 quadrillion per year, Energy and Mineral Resources Ministry Mining Directorate General Ridwan Djamaluddin said at a working meeting on Sept. 30.
Read also: Green, digital, downstream: Jokowi’s new economic strategy
