Sherritt pulls out from Sulawesi nickel project
Thursday, February 20 2014 - 02:35 AM WIB
TSE-listed nickel giant Sherritt International Corp has notified its partner mining giant Rio Tinto that it will not be pursuing the Sulawesi nickel project in Indonesia.
?Sherritt has no further funding obligations with respect to the project as of February 1, 2014 and, as a result, eliminated future funding of approximately US$70 million to 2017 under the project agreements,? the company said in a statement obtained Thursday.
The company said that the decision not to pursue the greenfield Sulawesi project was made in order to better enable Sherritt to focus on opportunities in its core metals and Cuban energy businesses, the view that nickel assets can be purchased on more attractive terms than they can be built, and an overall corporate focus on preserving liquidity.
The withdrawal from the Sulawesi project, however, is apparently made after the government of Indonesia introduced on January 12 the long-planned export ban on mineral ores including nickel ore in a bid to force miners to process the ores at home to generate greater value added.
Sherritt in 2010 first signed an agreement with a Rio Tinto unit to acquire a controlling 57.5 percent interest in the holding company that owns the Sulawesi nickel project, and Rio Tinto will continue to hold the remaining 42.5 percent.
Editing by Reiner Simanjuntak