The extension of PT Vale Indonesia’s contract of work will have potentials on the prospect of the country's electric vehicle ecosystem, with several investment planning in the development of nickel downstream. 

"This investment plan is for four projects." Minister of Investment/Head of Indonesia Investment Coordinating Board Bahlil Lahadalia said on Tuesday, on March 19, 2024.

PT Mineral Industri Indonesia (MIND ID), together with Vale Canada Limited (VCL) and Sumitomo Metal Mining Co., Ltd. (SMM) signed a share sale and purchase agreement for the divestment of PT Vale Indonesia (INCO) in Jakarta on February 26, 2024.

This agreement is a continuation of the Heads of Agreement signed on November 17, 2023. MIND ID together with VCL and SMM have agreed on the acquisition of PT Vale Indonesia shares by MIND ID, amounting to 14 percent of the total share ownership of the company.

The agreement signing is a crucial step for PT Vale Indonesia to fulfill its divestment obligations, as required by the Mineral and Coal Mining Law. This is a necessary prerequisite for extending PT Vale Indonesia’s Contract of Work through a Special Mining Business Permit (IUPK).

The first project, Bahlil said, is Sorowako HPAL smelter project. The project is a cooperation between Vale Indonesia and Huayou to produce 60,000 tons nickel per year in the form of Mixed Hydroxide Precipitate. Vale Indonesia will cooperate with automotive manufacturers or other non-Chinese investors such as POSCO, LG Chem, Ford and VW. 

"Investment value of this project is Rp 30 trillion or US$ 1.9 billion including the smelter and mine," Bahlil said.

The second project is Bahodopi RKEF smelter and Stainless Steel with the capacity of 73 kt-80 kt Ni/year in FeNi. For this project, Vale cooperates with TISCO and Xinhai. The investment value of the project is Rp 34 trillion or US$ 2.16 billion including smelter and mine. "The construction of this project is underway," Bahlil said. 

The RKEF smelter will be the second smelter with the lowest carbon emission intensity after the Sorowako smelter as it does not use coal but natural gas. 

This smelter will further develop the nickle downstream industry into stainless steel. 

The third project is Pomalaa HPAL smelter. The HPAL smelter will produce mixed hydroxide precipitate products with a capacity of up to 120,000 tons nickel 

per year in a colaboration Huayou and Ford. The total investment value of this project is Rp 66 trillion or US$ 4.2 billion including for smelter and mine. 

"The construction is underway and it will be further develop into precursore." Bahlil said. 

The fourth project is Soa HPAL smelter. Vale Indonesia has completed the final stage of exploration for this project. The HPAL smelter has a potential to produce 60,000 tons Ni/year in Mixed Hydroxide Precipitate. Vale will have partnership with international automaker or other non-Chinese investors.

The investment value of this project is Rp 30 trillion or US$ 1.9 billion including for smelter and mine. The smelter will develop further downstream to produce precursor.