Nickel Mines, a Sydney-based mining company, has invested around US$120 million to date in two new nickel pig iron production lines in Indonesia, expecting the new plant to start commissioning by end of June next year.
Nickel Mines has acquired a 60 per cent stake in a two-line Rotary Kiln Electric Furnace (RKEF) project being developed within Indonesia’s Morowali Industrial Park (‘IMIP’) in central Sulawesi, and which already operates 20 RKEF lines within the industrial park.
Nickel Mines’ other partner in the new nickel pig iron venture is Shanghai Decent, a Tsingshan group company. Tsingshan is currently the world’s largest stainless steel producer.
A collaboration subscription agreement executed in September of 2017 provides Nickel Mines with a capital guarantee of no more than US$200 million on a 100 per cent basis, and makes it amongst the lowest globally in terms of capital intensity.
The Australian company also has an 80 per cent interest in the operating Hengjaya open-pit nickel mine in central Sulawesi which is located nearby to IMIP.
Nickel Mines Managing Director, Justin Werner, says that foundation work and support structures for the rotary kilns and electric furnace were nearing completion.
“Material capital equipment components for the RKEF plant, including the rotary kilns and electric furnace, are now being fabricated in China.
“We expect these components will be ready for shipment to the IMIP towards the end of this calendar year with construction and commissioning in the first half of 2019,” says Mr Werner, adding that the plant’s commissioning would come at a time Indonesia was rapidly emerging as the epicentre of the world’s nickel sector growth.
Global nickel supply growth was also being dominated by nickel pig iron output.
The emerging Sydney nickel producer has the right to move to 100 per cent ownership of the two new lines within 12 months of commencement of production.
It is currently progressing a Memorandum of Understanding for an additional 2 RKEF lines which would take the total it has options over, to 4 lines, with total 33,000 tonne per annum of nickel metal capacity on a 100 per cent basis. This would make Nickel Mines the world’s largest pure play nickel producer on any bourse.