Vale Partners with Three Chinese Companies to Build Nickel Smelters in Indonesia

Industrials Author: EqualOcean News, ChenZhiheng Apr 19, 2024 04:15 PM (GMT+8)

Vale Indonesia/INCO has disclosed the company's cooperative projects to build three nickel ore refining and processing facilities, according to Indonesia International Daily. The three projects include (i) the construction of a smelter project in Pomalaa, Southeast Sudan Province, in cooperation with Zhejiang Huayou Cobalt Industry Co Ltd; (ii) the construction of a smelter project in Morowali, Central Sudan Province, in cooperation with Shandong Xinhai Science and Technology Co Ltd; and (iii) the construction of a smelter project in East LuwuTimur, Southern Sudan Province, in cooperation with Zhejiang Huayou Cobalt Industry Co Ltd. Ltd. in East LuwuTimur, Southern Province of Sudan.

The total investment required for the construction of the project is approximately US$8.6 billion to US$9 billion, which is equivalent to Rp 143.5 trillion.

"Downstream processing of nickel ore in Indonesia has to be accelerated, and we agree with that, so the three smelter construction projects that we have already announced at US$8.6 billion or about US$9 billion have to be implemented in parallel," BayuAji, senior PR executive of Vale Indonesia, said at a recent media press conference. "

These partners have the technology," Bayu said. At the moment, they are making more progress on the smelting side and we are making more progress on the mining side," Bayu said. All three projects are still under construction.

As you know, the U.S. Ford Motor Co. and China's Zhejiang Huayou Cobalt Metal Co. have agreed to sign a definitive investment agreement with INCO to build a nickel smelter worth about $4.5 billion, or the equivalent of Rs. 6.75 trillion.

In addition, the Pomalaa smelter project in the southeastern province of Sulawesi will produce 120,000 tons of mixed hydroxyl precipitates (MHP) per year using high-pressure acid leaching (HPAL) processing and production technology.

According to Reuters, Vale Indonesia (INCO) Chief Executive Officer Eddy said the company and Zhejiang Huayou Cobalt Metal Co Ltd expect to complete the smelter's construction program by 2026. He said the agreement is unique because it brings new experience for Ford to venture into the upstream nickel mining business.  Eddy said Vale Indonesia holds a 30 percent stake in the smelter project, with Ford and Huayu controlling the rest.

Speaking at the agreement signing ceremony, Ford public relations manager Christopher Smith said the deal marked Ford's first investment in Southeast Asia. "Ford can assist in ensuring that the finished nickel products we use in our global operations, including electric vehicle batteries, mining, and production, are compliant with ethical standards (ESG) based on the principles of fair presentation and full disclosure", he said.

Through the MINDID state-owned mineral holding company, the Indonesian government has become the largest shareholder in Indonesia's Vale Corporation (INCO). After some time, finally on Monday, February 26, 2024, MINDID signed the Joint Venture Company Share Acquisition Transaction Agreement to acquire 14% of INCO's shares for Rp 3,050 per share, with a total acquisition value of approximately US$300 million, equivalent to Rp 4.69 trillion, with the state-owned company officially owning 34% of INCO's shares, and the state-owned company officially owns 34% of the shares of Vale Indonesia, becoming the largest shareholder.

After the completion of the share transaction, the shareholding of the first largest shareholder, ValeCanada Limited, was reduced from 43.79% to 33.9%, making it the second largest shareholder, while the shareholding of Sumitomo MetalMining was reduced from 15.03% to 11.5%. The percentage of publicly traded shares in the Indonesian stock market (BEI) remained unchanged at 20.6%. Including the shares in the Indonesian stock market, Indonesia's shareholding in Vale Indonesia would be 54.6 percent.