Indonesia’s Vale, China Firm Sign $2bn Nickel Plant Deal

[艹艹艹]

Indonesia’s Vale, China Firm Sign $2bn Nickel Plant Deal​

September 6, 2022

An Indonesian nickel miner signed a big investment deal on Tuesday with China’s Shandong Xinhai Technology to build a processing plant on Sulawesi Island.​

An Indonesian nickel miner signed a big investment deal on Tuesday with China’s Shandong Xinhai Technology to build a processing plant on Sulawesi Island.

PT Vale Indonesia‘s chief executive Febriany Eddy said the project, in Bahodopi in Morowali district, would cost around $2.1 billion.

“With this signing we can proceed and accelerate construction work in the field so it can be completed by 2025 at the latest,” she said during the deal signing ceremony.

Shandong Xinhai Technology is a unit of China Baowu Steel Group.

Under the deal, the companies will form a joint venture firm, with Vale controlling 49% of the stake. Shandong Xinhai and Baowu, through its subsidiary Taiyuan Iron & Steel Co Ltd (Tisco), would together control 51%, Vale’s chief finance officer Bernardus Irmanto told reporters.

The Bahodopi project will produce ferro-nickel with 73,000 tonnes to 80,000 tonnes of nickel content per year, he said, noting the partners were also discussing the possibility of adding a stainless steel plant later on.

Wang Wenlong, the chairman of Shandong Xinhai, said at the signing ceremony the Bahodopi project would be the first nickel plant in Indonesia to be powered with liquefied natural gas.

In Pomalaa, another area on Sulawesi island, Vale and its partners are developing a plant to produce 120,000 tonnes per annum of mixed hydroxide precipitate, material extracted from nickel ore that would be used in batteries for electric vehicles.

 

[Indos]

Indonesian state owned mining Holding company, MIND ID, has 20 % stake of Vale Indonesia while the remaining is owned by Brazilian company, Japanese company, and public (traded in stock market). The stake of MIND ID will likely grow into 52 percent after 2025 because the mining contract of Vale Indonesia will be expired in that year. Their contract is signed in around 1990's if I am not mistaken

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Vale informs that its subsidiary PT Vale Indonesia (PTVI) has signed an amendment to its 1996 Contract of Work (CoW) set to expire on December 28, 2025 with the Government of Indonesia (GoI).

 

[Indos]

"Regarding funding, MIND ID already has a funding strategy for every corporate action plan that will be carried out," said Heri.

Just so you know, Vale Indonesia has an obligation to divest 51% of its shares according to the agreement signed in the amendment of the Contract of Work (KK) in 2014.

MIND ID Siap Caplok 11% Saham Vale Indonesia (INCO)