Solway Group to build $3 b smelter in Halmahera
Friday, February 18 2011 - 01:00 AM WIB
As part of the project, the firm will build a ferronickel smelter, power plant, port, and supporting infrastructure. The smelter will have a production capacity of 40,000 tons per year of ferronickel in the first production year in 2014.
The firm is expected to break the grounds for the project in May this year.
"Solway is interested to build a smelter in Indonesia on production efficiency consideration. Furthermore, Indonesia has ample nickel resources," Vasily Tsarev, president director of Bantry Corporartion which represents Solway Group di Indonesia told a press conference on Thursday evening
The power plant that it will build in the complex will be equipped with an integrated coal gasification technology. The capacity of the power plant will be 400 MW, of which 375 MW will be utilized by the firm and the rest to be sold to the surrounding community at low price. The power plant will use low rank coal sourced from Solway's coal mine in West Papua.
"We hope the smelter can start operation in 2014. Once it starts operation, we also plan to increase its capacity to 80,000 tons per year," he said.
Thus far, Solway has invested $55 million for pre-feasibility study and exploration activities on its 4,500-ha concession in East Halmahera. The firm has made drilling in a total of 3,000 points in the area, covering 30 percent of the concession area. The construction of the smelter is expected to cost $800-900 million and the construction of the power plant is scheduled to start in 2012.
Fifty percent of the project's costs will be covered by the firm using internal source, with the rest to be covered using loans. (*)