Vale Indonesia Intensifies Efforts on $9 Billion Nickel Downstream Projects
PT Vale Indonesia Tbk (INCO), following the divestment of 14% of its shares to the Indonesian Mining Industry Holding MIND ID, is set to expedite the development of three significant nickel downstream projects, totaling an investment of up to US$ 9 billion. The divestment deal, which saw MIND ID investing approximately US$ 300 million, will increase its stake in INCO to about 34%, alongside Vale Canada and Sumitomo Metal Mining holding 33.9% and 11.5% respectively, leaving 20.6% of the shares with the public.
Bayu Aji, Head of Communications at PT Vale Indonesia, highlighted the company's commitment to advancing projects in Central, Southeast, and South Sulawesi, which necessitate substantial investment. The three ambitious projects include the Sorowako Limonite project valued at US$ 2 billion, the Smelter Bahodopi at US$ 2.5 billion, and the Smelter Pomalaa at US$ 4.5 billion. Collectively, these projects are poised to produce 165,000 tons of nickel products, significantly contributing to the raw materials for electric car battery components through the production of Mix Hydroxide Precipitate (MHP) and Mix Sulphide Precipitate (MSP).
A standout venture among these projects is the High Pressure Acid Leaching (HPAL) Smelter in Pomalaa Block, Kolaka Regency, Southeast Sulawesi, a collaboration with Zhejiang Huayou Cobalt Co. This endeavor, marked as a National Strategic Project (PSN), is distinguished as the largest HPAL project with a total investment of IDR 67.5 trillion and an annual production capacity of 120,000 tons of nickel in MSP, employing 12,000 workers for its construction.
Furthermore, Vale Indonesia and the Indonesian Government are exploring opportunities for further nickel downstream value creation, such as converting RKEF smelter outputs in Southeast Sulawesi into stainless steel products. While these discussions are in preliminary stages, they reflect a strategic direction towards enhancing the nickel value chain.
In line with its developmental initiatives, INCO is also dedicated to reducing carbon emissions through a dual-path strategy. This includes transitioning from coal and diesel to lower-emission alternatives like gas or biomass and engaging in carbon offset activities through tree planting and reforestation of former mining sites. Vale's commitment to environmental sustainability is evident in its adoption of electric boilers and B30 at the Sorowako plant, alongside ongoing studies into the feasibility of utilizing LNG and biomass as energy sources.
