Vale Indonesia to increase capacity of Sorowako smelter

By Hiski Darmayana

IDX-listed PT Vale Indonesia Tbk plans to increase the production capacity of its smelter in Sorowako, South Sulawesi, to 120,000 tons per year over the next five years from the current annual capacity of 70,000 tons of nickel matte.

?Total investment for expanding the capacity is US$2 billion,? Vale Indonesia President Director Nico Kanter told Petromindo.com Tuesday.

He said that the company has already expanded the electricity furnace to facilitate the planned capacity expansion. ?However, the completion of the planned expansion will depend on the (result of) ongoing renegotiation of the contract of work with the government,? Nico said.

The company is currently in the process of renegotiation its contract of work with the government covering six issues including acreage, royalty, divestment obligation, contract extension, smelter and refinery facilities, and local content.

In termrs of production target for this year, Nico said that he expects output to increase by 10-12 percent to 79,000 tons from last year. ?We sell our entire nickel output to customers under long-term contract.?

The nickel ore production comes from Vale?s 190,513 ha concession scattered in three provinces including South Sulawesi, Central Sulawesi and Southeast Sulawesi.

Editing by Reiner Simanjuntak