Central Omega seeking partners to build smelter
Friday, January 27 2012 - 03:15 AM WIB
Indonesia-listed mining firm PT Central Omega Resources Tbk is currently pursuing negotiations with several potential partners to develop a nickel smelter in Central Sulawesi.
PT Central Omega Resources Tbk President Director Kiki Hamidjaja said in Jakarta on Thursday that there were three potential partners, two from China and one from Taiwan.
"We hope that within 6 months we'll have decided who are our partners. Then after that we'll start developing the smelter," he said.
He said that his company and the partners would set up a new joint venture, in which his company would only control between 30 and 40 percent of the smelter shareholding.
The smelter will have a processing capacity of 100,000 tons ferro nickel per year. At the initial stage it will need a total investment of about US$500 million, of which 70 percent will be derived from bank loans and the rest from equity.
The US$500 million fund will be used to build the smelter plant, port, and a 100-MW power plant, which will be built in Morowali, Central Sulawesi, adjacent to the 2 nickel mines operated by the company. The facilities will be finalized in two years.
The ferronickel product will be sold to the partners, who will also provide the technology for the nickel processing plant.
Until now, the company has sold all of its nickel ores to China. Last year, its nickel production reached 1.333.000 tons at the value of Rp 485 billion.
Its production target this year is 3.600.000 tons, and is expected to reach 6.000.000 tons next year.
"We push up our production and sale so that we can get enough fund to build the smelter. If we don't have the smelter until 2014, we'll be no longer allowed to do the nickel mining business based on the prevailing regulation," said the company's President Commissioner Johnny N. Wiraatmaja.
Currently, the company has 2 nickel working contracts (IUP), which have been in production, namely PT Mulia Pacific Resources (MPR) in Morowali, Central Sulawesi, with a total production of 100.000 tons per month, and PT Bumi Konawe Abadi (BKA) with a total production of 200.000 tons per month.
Editing by Benget Besalicto Tnb.