Central Omega to start construction of second smelter next year
Thursday, March 3 2016 - 12:55 AM WIB
IDX-listed PT Central Omega Tbk hopes to be able to start construction of a second 100,000-ton per annum nickel pig iron (NPI) smelter in North Morowali, Central Sulawesi, in the first semester of next year after construction of the first smelter with the same capacity is completed.
?The second smelter will start operation in 2018 assuming that everything goes smoothly from construction to funding,? said Central Omega President Director Ciho Darmawan Bangun on Wednesday.
He added that once the second smelter has been completed, the company will proceed with the construction of the third smelter with the same capacity, that would make the company to have total NPI production capacity of 300,000 tons per annum.
Ciho confirmed an earlier report in this portal that the first smelter, also located in North Morowali, is on track to be completed this year, with commissioning expected in the fourth quarter of this year, and trial production in the first quarter of next year.
He added that construction progress of the first smelter has now reached 55 percent.
Central Omega, which has not obtained revenue since 2014 after the government banned export of mineral ores, through subsidiary PT COR Industri Indonesia started construction of the first US$90 million smelter early last year. The company financed the project via loans obtained from Bank Panin and Exim Bank. China?s Macrolink Group owns 40.5 percent interest in COR Industri.
Ciho reiterated that NPI production (with 8-10 percent nickel content) from the first smelter next year is estimated at 72,500 tons, all of which will be exported to China.
He added that the company has yet to obtain export contract, but it has already signed an MoU with its Chinese partner, Macrolink.
Assuming NPI price of US$880 per ton, the company hopes to be able to obtain export revenue of $63.8 million. Assuming cost of sales of $1.62 million, gross profit in 2017 is projected at $12.18 million, and consolidated net profit at $11.16 million.
Editing by Reiner Simanjuntak