Huadi Nickel Adds US$458M of Investment for Bantaeng Smelter

Five smelters will operates in this year Indonesia, said the government official yesterday (01/23) - Photo: Special

JAKARTA (TheInsiderStories) – Nickel miner PT Huadi Nickel-Alloy Indonesia has re-injected Rp6.5 trillion (US$457.74 million) to build a smelter in Bantaeng, South Sulawesi, which is slated to be the area’ first nickel-processing facility. The smelter will initially produce 50,000 tons of ferronickel each year.

Huadi Nickel is a joint venture between Shanghai Huadi Industrial Co. of China and local firm PT Duta Nikel Sulawesi. Huadi’ Chinese affiliate supplies stainless steel for multinationals like aircraft maker Boeing and automobile producer General Motors.

The Chief Commissioner Amir Jao said the investment was for the addition of six stoves in the factory. The fresh funds have transferred directly to the Governor of South Sulawesi Nurdin Abdullah.

“Investment to add a factory stove has begun since early 2020. So, this year there will be an addition of four stoves. Next year will add two more stoves. Later the company will have eight stoves,” Jao said in Jakarta on Monday (07/13).

The construction of the mining processing center began in 2012. The advance phase of the smelter’ development has continued in 2017 and 2019 until the facility reaches its full production capacity, according to the firm’ plan.

Company’ Managing Director Jos Stefan Hidecky added the construction of the four nickel stove factories has begun in accordance with PT Perusahaan Listrik Negara deals. Next year the factory started to have electricity so that it could operate in April 2021.

Huadi’ smelter is part of overall investment totaling up to Rp40 trillion that Bantaeng Regency will receive in the next few years for nickel-processing facilities and supporting infrastructures, such as power plants, seaports, and water treatment installations, according to Governor Abdullah.

The smelter is set to occupy an area of 1,000 hectares in a 3,000- hectare plot provided by the local administration for the establishment of Bantaeng Industrial Park, planned to become Indonesia’ first integrated iron-and-steel industrial estate.

Indonesia, a major supplier of minerals including nickel and bauxite, has benefited from the government’ outright ban on exports of mineral ore and requirement for miners to process domestically since the beginning of 2014, seeing inflows of billions of dollars into mineral-processing facilities.

In the agreement signed in 2015, PT Bantaeng Sigma Energi will provide electricity for smelters to four firms’ PT Huadi Nickel, PT Titan Mineral Utama, PT Zhongning Mining Metallurgy and PT Mitra Tambang Selaras, as well as energy-resource supplier PT Mitra Selaras Sukses Sejahtera. The firm is constructing a 2×300 megawatt coal-fired plant in the new industrial center.

Following Huadi’ step, another firm’ Chinese firm Zhongning Mining’ said that it would in the near future commence construction of a smelter in the same area.

“We have already cleared the land and may start very soon. The equipment will be installed by the end of the year,’ said Zhongning Mining director Emir Yusuf months ago.

The planned smelter would annually produce 120,000 tons of nickel pig iron at the initial stage of operation before reaching 600,000 tons when, after a few years, development was complete, he added.

The firm will obtain the raw material from a number of mines in Southeast Sulawesi, while the smelters’ output will be exported to buyers in China.

Governor Abdullah said his administration would facilitate the flow of investment that would enter South Sulawesi. One form of support provided to investors is by facilitating the licensing process including support in investment-related policies.

US$1=Rp14,200

Written by Lexy Nantu, Email: lexynantu@theinsiderstories.com