Konawe Utara Regency Head Ruksamin (right) and MBG Group President Lim Dyong Pyo (left) visit MBG group project. (image credit: MetroRakyat.com, Kowane)

JAKARTA (TheInsiderStories) – South Korean Made By Good (MBG) Group, operating through its Indonesian subsidiary PT MBG Nikel Indonesia, is in the process of constructing a nickel smelter in Konawe, Utara Regency, Southeast Sulawesi Province, with an estimated investment of Rp76 trillion rupiah (US$5.32 billion).

The project, built on 311 hectares of land, is one of the most prominent nickel smelters being developed on the island, and also represents a major investment made by the South Korean company in the country’s mining sector. Impressed with this, the Industry Ministry and local governments in the Province have given full support to expedite the project proceeding as planned.

‘We do appreciate the efforts expended by Konawe Utara Regency, as it has played a significant role in bringing in investors to the (mining) industry,’ said Director of Industrial Area Development I of the Ministry of Industry Arus Gunawan.

The groundbreaking ceremony for the project was held on Jan. 2, 2018, and was attended by Konawe Utara Regency Head Ruksamin, the President Director of MBG Group Lim Dong Pyo and Commissioner of PT MBG Nikel Indonesia Jongsoo.

Construction is scheduled to be completed within two years.

The new smelter is in line with the Industry Ministry’s drive to develop the downstream sector, one which is expected to trigger a multiplier effect on the regional and national economy and ultimately strengthen the country’s overall industrial structure.

‘The output of the smelter is acutely needed by domestic industry, therefore contributing to meeting domestic market needs. In addition, the smelter will support competitiveness of the national industry,’ Arus said.

Konawe Utara Regency Head Ruksamin believes that the project will stimulate the local economy as well as creating hundreds of jobs.

Lim Dong Pyo said he is happy with the response of the local government and community and is committed to speed up construction on the project.

MBG Group is a bio-firm established in 2009 as a startup in South Korea’s top-notch science college, Korea Advanced Institute of Science & Technology. The company has been developing medical devices that have received first grade approval from the US Food and Drug Administration, alongside 20 general medications and medical supplies.

The company then decided to expand into nickel production as nickel is a key chemical element of EV batteries. The new plant will produce the nickel sulfate which is a key component of batteries. The company has inked deals with 23 mine owners to supply nickel ore.

Its plant is designed to produce around 30,000 tons of nickel sulfate, all of which will be exported to South Korean battery companies.

The investment in Indonesia is the third overseas venture of the company, after ones in America and Russia. In Indonesia MBG Group is also looking to invest in other sectors, such as shrimp farms, education and agriculture.

Industry Minister Airlangga Hartarto has stressed the importance of developing the downstream mining, including steel production. His Ministry targets production of 10 million tons of steel per annum by 2025 to meet domestic market needs, as well as 4 million tons of stainless steel per annum in 2019.

The Industry Ministry is aware of at least 32 smelter projects being developed, including those in the pipeline, with an estimated total investment of US$18 billion. (*)

Written by Roffie Kurniawan, email: roffien@theinsiderstories.com