Central Omega plans second smelter worth $350m

IDX-listed PT Central Omega Resources is already drafting plans for a second nickel pig iron smelter in North Morowali, Central Sulawesi, which is estimated to cost about US$350 million, much higher than the $90 million investment for the first smelter at the same location.

Kiki Hamidjaja, President Director of Central Omega, was quoted by Bisnis Indonesia as saying Wednesday that construction of the second nickel smelter, is expected to start in the second quarter of 2018, while its first smelter is expected to be completed in the third quarter of this year.

?The second stage smelter is targeted to be completed in 2019. Investment is estimated at $350 million with a 150 MW power plant that cost $150 million,? Kiki said at a public expose meeting.

He added that about 30 of the investment requirement for the second smelter will come from equity, with the bulk 70 percent via loans from banks led by Indonesia Exim Bank. Central Omega will team up with China?s Macrolink Group in the second smelter project through a 60:40 percent joint venture firm called PT COR Industri Indonesia. Macrolink is also Central Omega?s partner in the first smelter project.

The joint venture plans to develop a combined 300 million tons per annum nickel pig iron smelter in North Morowali, with first smelter to have a capacity of 100 million tons per year, and the second also 100 million tons per annum.

The second smelter requires higher investment because it will utilize a much advanced technology called rotary kiln electric furnace (RKEF), instead of blast furnace technology used in the first smelter, Kontan reported quoting Kiki. The RKEF requires greater electricity supply, thus the construction of a 150 MW power plant.

The first smelter is expected to start commissioning process in the fourth quarter of this year, and trial production in the first quarter of 2017. (*)