Eramet plans to spend $5.5 billion for smelting plant

By Godang Sitompul

Through its Indonesian subsidiary Weda Bay Nickel (WBN), French mining giant Eramet will invest up to US$5.5 billion for the construction of a nickel smelting plant in Halmahera, North Maluku.

The smelter, which will have capacity to produce 65,000 tons of nickel and 3,500 tons of cobalt sulfides a year, will use hydro-metallurgy.

Energy and Mineral Resources Minister Jero Wacik said in Jakarta on Friday that in the first stage, Eramet would invest about $3.5 billion to build a smelting plant which would have capacity to produce 3,500 tons of nickel a year. The smelting plant would absorb at least 3,500 workers.

?I have told them that 90 percent of the labor force should be hired from eastern part of Indonesia,? Jero said, adding that the training centers for the workers would be built in Makassar and Kupang. ?We strongly support the smelting plant project because it brings many benefits to the local economy,? he added.

Wacik, however, said that issues related to divestment requirement and royalty payment had not been settled in the renegotiation of the company?s contract of works with the government. The minister said that the government was still calculating the amount of shares which have to be divested by the company because it is not only engaged in upstream but also in downstream operations.

Editing by Adianto P. Simamora