JAKARTA, April 29 Indonesia expects the first
stage of a $1-billion nickel pig iron smelter being built by PT
Sulawesi Mining Investment in Central Sulawesi to start
operations by the end of 2014, the industry ministry said.
Indonesia, the world's top exporter of nickel ore, is
pushing mining companies to add more value within the country,
and will not allow unprocessed mineral exports after January
The rule has been widely criticized by miners, who say
building smelters is not a viable option for all the metal ores
Benchmark nickel prices have lost around 11 percent
this year, last week hitting their lowest in almost four years
near $15,000 a tonne, as global supply outpaces demand, and
slower growth forecasts have dimmed longer-term prospects.
On Monday, nickel stood at $15,250 a tonne by 0354 GMT.
The first stage of the smelter being built by SMI, a joint
venture between Indonesia's PT Bintang Delapan Group and China's
Tsingshan Group, is 30 percent complete, the ministry said in a
statement, quoting Alexander Barus, Vice President Director of
PT Bintang Delapan Mineral.
"Our current investment has reached $100 million from the
total investment (including the second-stage investment) of $
1.06 billion," said.
Total investment for the first stage of the project is $320
million, with expected production of 300,000 tonnes of nickel
pig iron each year, most of which will be exported to China.
The second stage of the project, expected to cost another
$640 million, will begin in July 2013 and will add another
500,000 tonnes to the plant's nickel pig iron output, as well as
a 450-MW power plant. Eventually the firm expects to produce
stainless steel at the plant, Barus said.
The SMI plant will be among the first nickel pig iron
smelters outside China, Indonesia's top customer for nickel
laterite ore. The Indoferro smelter that started last year aimed
to produce 250,000 tonnes of NPI in 2013.
SMI was not immediately available for comment.
(Reporting by Yayat Supriatna; Writing by Fergus Jensen;
Editing by Clarence Fernandez)