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Vale Indonesia working with Sumitomo Metal to develop US$2B ferronickel smelter

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Vale Indonesia working with Sumitomo Metal to develop US$2B ferronickel smelter

PT Vale Indonesia Tbk. is planning to construct a previously reported US$2 billion ferronickel smelter in Pomalaa, Southeast Sulawesi, The Jakarta Post reported March 29, citing the company's president director, Nico Kanter.

The Vale SA unit is working with Sumitomo Metal Mining Co. Ltd. to develop high-pressure acid leaching technology for the plant, where construction is expected to start in 2018 with operations starting in 2023.

According to a November 2016 report, the Vale subsidiary was considering selling majority stakes in two nickel smelter projects in Indonesia to investors from China, Japan and Canada in a bid to meet significant investment needs, as the parent company can only provide less than US$100 million in annual CapEx.

The company is awaiting forest area utilization permits for the project and is revising its environmental impact analysis.

Vale Indonesia is also engaging with unnamed Chinese investors to take part in building a new nickel smelter project in Bahodopi, Indonesia, according to a same-day report from the Jakarta Globe, with US$90 million earmarked for the project this year.

According to Kanter, the company is planning to start a pre-feasibility study on the Bahodopi smelter in September.

In addition, the company plans to upgrade its existing nickel smelter in Sorowako, looking to add 10,000 tonnes per annum of production capacity to produce 90,000 tpa of nickel in matte by 2019, The Jakarta Post added.