Sumitomo Metal Mining Co. Ltd., (SMM), targeting to operate Pomalaa nickel owned by PT Vale Indonesia Tbk (IDX: INCO) mining in the mid of 2020 - Photo by INCO

JAKARTA (TheInsiderStories) – Japanese miner, Sumitomo Metal Mining Co. Ltd., (SMM), targeting to operate Pomalaa nickel owned by PT Vale Indonesia Tbk (IDX: INCO) mining in the mid of 2020, said the management on Monday (11/18). The projects located in Southeast Sulawesi.

Sumitomo stated that the project will produce around 40,000 tons of mixed sulphide nickel from currently around 70,000 tons of nickel. It will be the third plant which using high pressure acid lead (HPAL) technology in nickel processing, following CBNC and THPAL plant in Philippines.

Previously, deputy president director of Vale Indonesia, Febriany Eddy, statedto build the smelter in Pomalaa need investment US$2.5 billion. SMM will bear most of the investment and make the Japanese miner become the major shareholder, holds 51 percent of the project’ equity.

She also confirmed the use of HPAL which can convert low-grade nickel oxide ore. This technology is claimed to be very suitable with the character of nickel in Pomalaa which has a fairly high cobalt content of 10 percent.

In addition, Vale will also develop a nickel or smelter refining project in Bahodopi, Central Sulawesi. In developing this project, Vale plans to engage with Chinese investor.

Negotiations with the Chinese company are planned to complete by the end of this year and its expecting the Bahodopi smelter can operate next year. After operation, the smelter will use Rotary Kiln Electric Furnace technology but with lower emissions.

SMM is one of shareholder in Vale Indonesia. Previously, SMM along with Vale Canada was officially reduce their stakes in Vale Indonesia by signing head of agreement with PT Indonesia Aluminium Asahan or MIND ID. Following this agreement, the state-owned holding mining will acquire 20 percent of the miner’ stake.

Budi Gunadi Sadikin, deputy minister of state own enterprises, said that the acquisition will be completed before the end of 2019, faster than the initial target in 2020. The faster process is due to the both parties has decided the valuation of INCO’ share.

To date, Vale Canada is still the majority shareholder with 58.73 percent stake, followed by SMM with 20.09 percent stake and public 20.49 percent. In term of financial performance, Vale Indonesia recorded unsatisfied result in third quarter of 2019.

The miner booked revenue of $506.46 million, jumped by 12.61 percent from last year of $579.59 million. The net profit in third quarter of 2019 was also not expected by decreasing to $160 thousand, lower than previous period of$55.2 million.

Written by Staff Editor, Email: theinsiderstories@gmail.com