MBI begins nickel smelter construction

PT Multi Baja Industri (MBI) has started the construction of a nickel smelter in Tuban, East Java, with the aim of completing it in 2016.

The US$251 smelter will process nickel ores from Halmahera and South Sulawesi into ferronickel, a raw material for the production of stainless steel. The ferronickel output would be exported to Asian markets such as China, India, Japan, and Taiwan, and also Europe, said MBI President Director Arief S. Tiammar at a ceremony on Saturday held to mark the start of the construction of the smelter.

Construction firm PT Hutama Karya has been appointed to construct the smelter, which will have a capacity of 110,000 metric tons of ferronickel. To achieve the capacity, the smelter will require about 1.2 million wet metric tons of nickel ores.

Arief said that Tuban was decided to become the location of the smelter because the region has sufficient electricity supply.

He added that while MBI is fully a domestic company, going forward, it is open to partnership with foreign investors. BMI plans to further expand the capacity, and invest in stainless steel production in the future, he said.

Editing by Reiner Simanjuntak