JAKARTA (TheInsiderStories) – Unit of Singapore Catalist listed’s Silkroad Nickel Ltd.,(SGX: STP) signed a head of agreements to form a joint venture for smelter facilities construction in Morowali, South Sulawesi, said the company on Tuesday (18/09). The definitive agreements are expected to be signed no later than six months.
An Indonesian nickel mining group, announced that its subsidiary, PT Teknik Alum Service (TAS) and PT Artabumi Sentra Industri1 (PT ASI) entered into a non-binding agreement to acquire 100 percent shares of owner of local miner PT Anugrah Tambang Smelter (ATSM).
Through ATSM, Silkroad said, has plan to build and operate smelter facilities for the production of nickel pig iron on the group’s mine site in Morowali. ATSM currently holds valid principle and location permit licenses for construction of a smelter factory in Buleleng Village, Bungku Pesisir Subdistrict, Morowali regency.
ATSM has an issued share capital of Rp12.5 billion (US$862,069) and is 99 percent and 1 percent owned by PT Bina Mitra Serasi (BMS) and Hong Kah Ing, executive and chief executive officer of the company, respectively. BMS is 4 percent and 96 percent owned by Hong and his spouse, respectively.
Furthermore, Silkroad explained, TAS will provide a shareholder loan of $1 million for working capital purposes to ATMS while ASI will provide the necessary smelter equipment, machineries and technical knowledge to build and operate a smelter facility, and the cost of such equipment and machineries.
“This marks the Group’s foray into a downstream cost efficient mine mouth business and is a step towards our Group’s strategy of becoming an integrated nickel mining company,” said Hong at the written statement.
Silkroad Nickel engaged in the business of exploration, mining, production and sale of nickel ore and has been granted the mining license to conduct nickel ore mining operations in the mining concession area, covering approximately 1,301 hectares located in Morowali.
The company has an annual production level of approximately 370,000 wet metric tonnes (wmt) and an estimated inferred and indicated mineral resources of approximately 66.5 million wmt with an average grade of 1.1 percent Ni within an area covering around 38 percent of its mining concession areas.
The Group has sold its nickel ore domestically, and has achieved an aggregate sales volume of 312,549 wmt in 2017. In order to diversify its customer base beyond the domestic Indonesian market, Silkroad has applied to the Ministry of Energy and Mineral Resources to commence the application process for the export quota to sell and export low grade nickel ore.
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