Beijing-based industrial and technology firm Shenwu Group will invest up to $176 million to build a nickel processing plant in Situbondo, East Java, according to its executive.
The smelting plant, construction of which is expected to be completed in 48 months, will produce 81,200 tonnes of ferronickel alloy, with a nickel content of 14 percent, as its annual output, according to Shenwu Group deputy general manager Deng Fuhai.
The smelting plant, which is equipped with the latest energy-saving technology and environmentally friendly nickel refining process, will process nickel ores produced by several mid-size mining companies.
Haliem Hoentoro, the chair of PT Pandu Citra Mulia, one of the nickel suppliers to the smelting plant, said that the specification of the smelter was “very suitable” for Indonesia due to its low electricity usage as well as its low emissions.
“The smelter will not need too many cooking coals for its operations, and it will only need around five to 10 megawatts of electricity,” said Haliem.
The 2009 Mining and Coal Law obliges mining companies in Indonesia to process or refine their produced ores in the country. Joint ministerial regulations issued in May demand a 20 percent tax for the export of 65 types of raw minerals, to discourage exporting.
The regulations reportedly irked several countries that imported Indonesian metal ores, especially Japan, the world’s second-largest nickel consumer, which has already threatened to file a complaint with the World Trade Organisation (WTO) regarding the new policy.
Ahead of Japan, China, whose consumption is estimated to stand at around 680,000 metric tonnes per day, most of which is imported from Indonesia.
Shenwu Group’s Deng, meanwhile, believe that building a smelting plant in Indonesia would benefit China, and said that his country would suffer economically because of the law. “The ferronickel produced from this project will be an alternative supply for stainless steel producers in China, boosting trade between Indonesia and China,”
Nickel, a bright metal that has low conductivity and is resistant to corrosion, is mainly used in the production of stainless steel, magnets, rechargeable batteries, coinage and electric guitar strings.