Silkroad Nickel Ltd. together with its subsidiary PT Teknik Alum Service (TAS) has signed head of agreement with its partners to operate nickel pig iron smelter in Morowali, Central Sulawesi - Photo by the Company

JAKARTA (TheInsiderStories) – Singapore miner, Silkroad Nickel Ltd. (SGX: STP) together with its unit PT Teknik Alum Service (TAS) has signed head of agreement with its partners to operate nickel pig iron (NPI) smelter in Morowali, Central Sulawesi, said the company on Dec. 4.

The companies planned to build the project through PT Anugrah Tambang Smelter (ATSM) after acquired the miner from Singapore’ Energy Holding Pte Ltd., and PT Artabumi Sentra Industri (ASI). ASI is owned by China’ Qingdao Yunjia Electric Appliances Co. Ltd (95 percent) and Wu Guilin (5 percent).

While, ATSM, a limited liability company, currently holds a valid location permit license for construction of a smelter factory in Morowali. For the transaction, the company has issued share capital Rp12.5 billion (US$892,857) and is 99 percent and 1 percent owned by PT Bina Mitra Serasi and Hong Kah Ing, executive director and CEO of the company, respectively.

After the transaction, Silkroad and others will set up a joint venture and will enter into a shareholders’ agreement. The company will be the majority shareholder of the new company and intends to operate 12 blast furnaces and ancillary equipment for the production of NPI.

The total amount payable for the new entity $30 million and the payment terms are to be mutually agreed by the parties. In addition, the company or Silkroad shall acquire three of 7.5 megawatts power plants and the corresponding ancillary equipment to supply power to the blast furnaces for a maximum price of $20 million.

The completion of the agreements its expecting on June 30, 2020, whichever earlier. Silkroad is listed on the Catalist board of the Singapore Exchange Securities Trading Limited. The Group is principally engaged in the business of exploration, mining, production and sale of nickel ore and has been granted the Production Operations 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.

US$1: Rp14,000

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