Vale to start using coal at kiln in Q1 2014
Tuesday, September 24 2013 - 05:48 AM WIB
Nickel mining giant PT Vale Indonesia Tbk will start using coal, rather than fuel oil, at the ore-drying kiln of its smelter in Sorowako, South Sulawesi in the first quarter of 2014, a senior official of the company said on Tuesday.
The firm has launched a project to replace high sulfur fuel oil (HSFO) with coal as fuel for the kiln and the HSFO-to-coal conversion program is now under commissioning stage, Chief Financial Officer Febriany told Petromindo.com.
?Once the conversion project has started operation, we expect to save costs by 2 percent,? Febriany said.
Coal is much cheaper than HSFO. Last year, according to Febriany, the firm consumed 679,306 barrels of HSFO with an average price of US$100.76 per barrel.
Febriany said Vale will buy coal from the local market through traders, but at present, the firm can not unveil the exact amount of coal it needs since the amount will depend on the capacity of the smelter which the firm is planning to expand.
At present, the firm has a smelter which processes nickel ore into nickel matte. The smelter now has a production capacity of 75,000 tons of nickel matte a year and the firm has planned to increase the capacity to 120,000 tons within five years.
Editing by Johannes Simbolon