Vale fears technical failure at electric furnace to affect production

By Thomas Sembiring

IDX-listed integrated nickel mining firm PT Vale Indonesia Tbk said that one of the transformers at its electric furnace underwent a technical failure early this month, raising fears that it would affect production in the fourth quarter.

?In early November, one of the transformers in the electric furnace No 3 suffered technical failure, there was no one hurt because it?s not an accident,? said Bayu Widyanto, Finance Director of PT Vale on Monday.

He said the company will take measures to fix the problem and reduce the impact on production. He, however, could not yet estimate how it would affect the company?s production performance this year.

?We could not yet provide any figure because we?re still making evaluation to measure the impact on production,? Bayu said.

PT Vale has set production target of 80,000 tons of nickel in-matte this year. As per the first nine months of this year, output has reached 58,000 tons, or 73 percent of the full-year target.

Regarding production target for 2017, Bayu said it would be higher than 80,000 tons, probably increasing to around 90,000 tons. He said the company plans to allocate US$90 million worth of capital expenditure, about $15 million to be allocated for heavy equipment.

Elsewhere, Bayu said PT Vale is also optimistic that the current nickel price of about $11,000 per ton can be maintained next year.

Editing by Reiner Simanjuntak