Indonesia’s First Integrated Weda Bay Industrial Park Construction Begins

Weda Bay in Halmahera, Maluku Provinces - Photo by Eramet SA

JAKARTA (TheInsiderStories) – The construction of the first integrated industrial zones in the wold for mineral resources Weda Bay Industrial Park was started marked by the laying of the first stone by the Coordinating Minister for Maritime Affairs Luhut Panjaitan on Thursday (30/08).

Based on the PT Indonesia Weda Bay Industri Park’ statement, the construction of the industrial zones in Halmahera, Maluku, need investment around US$10 billion. The joint venture company own by Chinese investors namely Tsingshan Holding Group, Huayou Cobalt Co., and Zhenshi Holding Group.

Tsingshan joined with France’ Eramet SA and local miner PT Aneka Tambang Tbk (IDX: ANTM) has planned to develop nickel smelter in the Weda Bay Industrial Park. Its unit PT Weda Bay Nickel will begin realizing the construction of a cobalt and nickel smelter and processing plant in this year. The construction of this smelter will be carried out in two stages.

The Weda Bay Nickel project is an industrial and mining project aiming to recover one of the largest nickel deposits in the world. Its measured, indicated, and inferred resources are valued at more than 9.3 million tons of nickel.

After the put option exercised by Mitsubishi Corporation in April 2016, ERAMET holds a 100 percent stake in Strand Minerals Pte. Ltd. which owns 90 percent of Weda Bay Nickel.

On Feb. 23, 2017, the Eramet signed with the Chinese steel producer group Tsingshan, the leading world steel producer. The Memorandum Of Understanding establishes the conditions for a partnership to develop this asset.

The partnership would entail producing a nickel ferroalloy from Weda Bay ore in Indonesia based on a pyrometallurgical process, for a nameplate capacity of 30,000 tons of nickel per year. This partnership would be reflected by the entry of Tsingshan in Singapore-based Strand Minerals Pte Ltd. ERAMET would hold 43 percent of the shares and Tsingshan group 57 percent.

WBN has invest $3.3 billion for the construction of the first phase of the smelter in 2014. The first phase project have nickel production capacity of up to 35,000 tons of nickel per year and cobalt of 1,300 tons per year and absorbed 3,500 workers.

He continued, for the second phase need an investment of $2.2 billion. “So that the total investment reaches US $ 5.5 billion,” he said.

According to him, the construction of the second phase is targeted to be completed in 2018. If the second stage of smelter construction has been completed, Weda Bay’s production capacity will increase to 65,000 tons per year for nickel and cobalt as much as 3,000 tons per year.

“Later, it will be supplied to steel companies for carbon steel and stainless steel products,” he continued.

In addition, he explained, the Weda Bay also expressed its commitment to using local raw materials for the construction of the smelter plant. Besides WBN, Sutanto said, several other companies also have the potential to start smelter construction projects this year like Dubai Aluminum, which wants to build aluminum smelters in Indonesia.

In addition to facilitating metal refining activities, the Weda Bay Industrial Area its expecting will attract investors to build downstream processing facilities including nickel sulfate to end products in the form of Li-ion batteries for electric vehicles.