Nickel mining company PT Vale Indonesia Tbk will lower its capital expenditure (Capex) for 2023 by allocating US$ 110 million for mining development, heavy equipment replacement and Bahodopi smelter block 1.
Vale Indonesia, previously known as PT International Nickel Indonesia Tbk, was established in 1978. The company and the Indonesian government signed the Contract of Work (CoW) for the exploration, mining and processing of nickel ore. The company currently has two subsidiaries:
- PT Bahodopi Nickel Smelting Indonesia with 99.9%;
- PT Kolaka Nickel Indonesia 99.9%.
Smaller Capex for 2023
Vale Indonesia Director of Finance, Bernardus Irmanto, said the allocation for the 2023 Capex would be slightly lower than in 2022. The decrease was due to the allocated fund for the rebuild of Tanur 4, he said.
“The 2023 allocation is still for mine development, heavy equipment replacement and Bahodopi smelter block 1,” he said as quoted by Kontan.co.id on December 12, 2022.
The company has absorbed Capex of US$100 million until September 2022 from a total of US$120 million.
Vale has revised down its projected nickel matte to 61,000 tons from the original target of 65,000 tons of nickel matte.
In 2023, the company is targeted a higher production volume. In 2022, the production was 43,907 metric tons (MT), compared to 48,373 MT of nickel matte in 2021 of the same period.
By Q3 2022, Vale managed to produce 17,513 MT of nickel matte, a 39% increase of production volume compared to Q2 2022 at about 12,567 MT. Its increase of production in Q3 was in parallel with the completion of Tanur 4 in June 2022.
Risk in mining industry
Vale Indonesia has not renewed its extension of the Contract of Work to become a Special Mining Business Permit with the Ministry of Energy and Mineral Resources. The contract will expire in 2025.
Meanwhile environmentalist groups have repeatedly warned on the environmental damage due to massive mining exploration.
Indonesian Forum for the Environment (Walhi) said a field study found waste heat dissipation from the activities of the nickel industrial area in Central Sulawesi. Meanwhile, the Network for Mining Advocacy (Jatam) said: “The impact of nickel mining in this area, ranging from land loss to air and environmental damage, when accumulated, creates tremendous destructive power that will be felt for generations to come. This is not calculated by the state and companies.”
