Eramet to invest $1.5b in Halmahera nickel project

French mining company Eramet SA will spend $1.5 billion to develop the Weda Bay nickel project in Halmahera, North Maluku.

Eramet would build infrastructure, including a port to ship the metals from the Weda Bay mine, chief executive officer Jacques Bacardats said in Jakarta on Tuesdy after meeting officials of the Ministry of Energy and Mineral Resources.

In March, Eramet acquired Canada's Weda Bay Minerals Inc. for C$270 milllion (US$245 million), which owned the nickel mining project in a partnership with state owned mining firm PT Aneka Tambang.

Eramet has mined nickel for more than a century on New Caledonia. It also mines manganese in Gabon.

"Exploration work has proven that the Weda Bay ore body is of world class," Bacardats said. The mine may produce 60,000 metric tons a year of nickel but it's "too early" to say when production will begin, he said.

According to the contract with the government, Eramet will have to start production in Halmahera within five years at the latest, said the ministry's director general of mineral, coal and geothermal resources Simon Sembiring.

"Eramet is going to start feasibility studies right away," Simon said. "The contract says Eramet has up to two years for that and another 36 months to complete construction of the mining facilities before production begins."

Estimated resource of nickel ore in the contract area is at 500 million tons, Malcolm G. Baillie, president director of Weda Bay's Indonesian unit, said. The estimate "is not the ceiling" and resource may prove to be even bigger than that, he said.

Data from the ministry show that nickel content in the area is about 1.3 percent, Simon said. This means that the Weda Bay project may produce 6.5 million tons of nickel. (Godang)