Nickel mining company PT Vale Indonesia Tbk has agreed to collaborate with China’s Zhejiang Huayou Cobalt Co. Ltd. to develop a smelter with High Pressure Acid Leaching (HPAL) technology in Sorowako, South Sulawesi. The two companies’ cooperation has started early this year. Huayou conducted the feasibility study, which has resulted in a positive outcome.
Both companies signed the Heads of Agreement on September 13, 2022. The agreement will serve as reference for further detailed agreements to increase their cooperation.
The new HPAL plant will process nickel limonite ore into Mixed Hydroxide Precipitate (MHP) product with the planned annual production capacity of around 60,000 tons of nickel. The MHP can then be processed into materials for battery components for electric vehicles.
Sustainable mining target
One of the most important points of this collaboration is the commitment of both companies to achieve carbon neutrality by 2050 and the agreement to work together to minimize carbon emissions. Huayou will further discuss with Vale to study low-carbon energy alternative.
Vale Indonesia CEO Febriany Eddy said the joint development project is one of the targets to meet the company’s commitment to sustainable mining. It would also serve as Vale’s strategy to support the government program to build an electric vehicle ecosystem in Indonesia.
“We are happy to extend our cooperation with Huayou Cobalt on such an important project. This partnership agreement is another catalyst for sustainable economic development of Indonesia’s world-class nickel resources. Together with recent progress on the Pomalaa HPAL facility and Bahodopi Block Project, we are committed to executing our next generation of sustainable growth projects with minimal environmental impacts for the benefit of local and national stakeholders,” said Deshnee Naidoo, President Commissioner of Vale Indonesia and Executive Vice President of Vale Base Metals.
Huayou Chairman Chen Xuehua said during the ceremony: “Our cooperation is a perfect combination of Vale’s mineral resource advantage and Huayou Cobalt’s advanced High Pressure Acid Leaching technology advantage to achieve low-carbon, green and sustainable mineral resource development. Our cooperation can also win growth opportunities for both sides, add strength and value to the industry, and make contributions to the economic and social development of Indonesia.”
Read also: Three Sulawesi governors request government not to extend Vale Indonesia’s contract
Vale Indonesia’s smelter projects
Vale Indonesia met with the House of Representatives (DPR) on September 6, 2022, saying that the company had constructed three nickel smelters in Sulawesi. One of the projects is the expansion of a nickel matte smelter in Sorowako, South Sulawesi, in collaboration with a partner. Ore supplies for the smelters will come from nickel blocks in Sorowako and the surrounding areas owned by Vale Indonesia.
The second project involves the construction of a rotary kiln-electric furnace (RKEF) in Bahodopi, Central Sulawesi. According to Vale Indonesia representative, the company signed a binding agreement on the final investment with its partners Taiyuan Iron & Steel (Grup) Co. Ltd. (TISCO) and Shandong Xinhai Technology Co. Ltd. (Xinhai). The companies have agreed upon commercial and technical issues.
“We have begun early construction of the RKEF smelter in Bahodopi, with an annual capacity of 73,000 to 80,000 tons of ferro nickel,” Vale’s representative said. The construction of a jetty, roads and employee’s dormitory were among the early works.
A third project involves high-pressure acid leaching (HPAL) in the Pomalaa block in Southeast Sulawesi. The HPAL will require a construction of a smelter with a capacity of 120,000 tons of nickel per year in cooperation with Huaoyu and Ford Motor. As part of its plans, the company intends to upgrade its jetty from 40,000 tons to 120,000 tons of power. The company sets a target of completing the projects by 2025.
Total number of smelters
Acting Director General of Mineral and Coal of the Ministry of Energy and Mineral Resources, Idris Sihite, said that 17 smelters were currently under construction and would be operational by 2024. In addition to being integrated with mining, these smelters are overseen by the energy ministry. The 17 smelters consist of seven nickel smelters, seven bauxite smelters, one copper smelter and two iron smelters. The total investment for all smelters is US$ 11.3 billion while the investment for nickel smelters is US$ 2.67 billion.
State-owned mining company PT Aneka Tambang Tbk (Antam), mining and smelter firm PT Wanatiara Persada, PT Fajar Bakti Lintas Nusantara, Vale Indonesia and PT Weda Bay Nickel are the current owners of nickel smelters. The input capacity of the smelter is 15.7 million tons per year.
Meanwhile, there are other smelters in the pipeline including those owned by Antam and PT Ang And Fang Brother, which have an annual input capacity of 3 million tons of ferro nickel and an output capacity of 200,000 tons. The smelter will likely be completed by 2023.
