PT Vale Indonesia Tbk (INCO) and PT Bahodopi Nickel Smelting Indonesia broke ground on Friday on their low-carbon integrated nickel mining and processing project. They will mine nickel in East Bungku and Bahodopi districts, while the smelter will be in Bungku Pesisir district. The 37.5 trillion Dong project will have a capacity of up to 73,000 tons per year and is expected to be built in the next 2.5 years.
Listed as a national strategic project, the nickel smelter will use a rotary kiln electric furnace (RKEF) powered by a natural gas power plant to reduce carbon emissions by about 33 per cent by 2030 "" This is the first green, LNG based smelter I have seen. It's green energy, products and mining, "Airlangga said.
The Indonesian government hopes the Integrated Nickel project will boost the economy of Central Sulawesi, especially Sulawesi as a whole. About 12,000 to 15,000 workers will be employed during the construction phase and 3,000 workers will be needed for future operations. At the same time, ground was broken on the construction of Bahomotfi Port in Airlangga. The port will support regional connectivity and logistics chains for downstream products.
PT Vale Indonesia Tbk (INCO), Taiyuan Iron and Steel (Group) Co., LTD. (TISCO) and Shandong Xinhai Science and Technology Co., LTD. (Xinhai) have formed a joint venture, PT Bahodopi Nickel Smelting Indonesia, in the construction of the smelter. PT Vale Indonesia Tbk (INCO) is still looking for LNG suppliers for the coal and gas or combined cycle power plant (PLTGU) that will power the Bahodopi nickel-iron smelter. Feasibility studies indicate that the 500 MW plant will require 22 MMBTU of gas per year.
PT Vale Indonesia Tbk (INCO), TISCO and Xinhai have set aside US $300 million of the smelter's US $2.1 billion investment fund for PLTGU and LNG facilities, and US $5 million for research and development at the plant. In addition, PT Vale Indonesia Tbk (INCO) will do its best to secure LNG supplies domestically for Bahodopi smelter PLTGU, but it is also prepared to source from overseas. The Bahodopi smelter will also produce raw materials for electric vehicle batteries, such as mixed sulfide precipitates (MSP) and mixed hydroxide precipitates (MHP), which are by-products of nickel, according to the filing.
Vale Indonesia was already working on construction projects ahead of the groundbreaking ceremony. For the factory, construction of site formation and supporting infrastructure such as dormitories is already underway, while most of the land acquisition and permit process has been completed. For the record, PT Vale Indonesia Tbk (INCO) proposed Bahodopi's integrated nickel mining and processing project as part of a national strategic project in 2021. The company currently holds several work contracts (KKS) covering a total concession area of 22,699 hectares in the Bahodopi block with a total investment of US $140 million required to finance mining projects.
