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:: Bintangdelapan Joins Chinese Partner to Complete $5b Smelter Plant
Bintangdelapan Group, a local business group with interests including mining, chemicals, oil and gas and timber processing, has joined hands with Tsingshan Holding Group to build a nickel smelter project in Morowali, Central Sulawesi. Tsingshan is China?s largest ferronickel and stainless-steel maker. The project is estimated to be valued at between $4 billion and $5 billion. The completed smelter will be owned by Sulawesi Mining Investment, a joint venture between the two groups.
Bintangdelapan is thought to have ties to the Indonesian Military, with Lt. Gen. Sintong Panjaitan sitting as president commissioner at the company.
SMI vice president director Alexander Barus said that the smelter will process around 9 million tons of nickel ore into 900,000 tons of ferronickel per year.
Ferronickel, which consists of a mixture of iron and nickel, is an important material in stainless steel making, and is also used in various electronic devices and batteries.
Alexander, who on Tuesday met with Industry Minister MS Hidayat at his office in Jakarta, said project development had been divided into four stages.
SMI held the groundbreaking ceremony for the first stage of the project in June last year. Now, 45 percent of the construction of the smelter has been completed, and currently the plant has a capacity of 300,000 tons of ferronickel annually.
For the second stage, the smelter capacity will be increased to 600,000 tons and a 300 Megawatt coal-fired power plant costing $1.04 billion will be built to support the smelter operation. "The entire project is planned to be completed before 2018," Alexander said.
Construction of the smelter is being handled by Indonesia Guangqing Nickel Industry, a joint venture between the Chinese firm and Indonesia Morowali Industrial Park (IMIP), an industrial park developer.
The investment also covers construction of a diesel power plant, oxygen plant and a cargo dock with the first stage of development requiring a $722.3 million in investment.
Alexander said the nickel ore would be supplied by Bintangdelapan Mineral (BDM), a subsidiary of Bintangdelapan Group, which has committed to supply up to 3 million tons of nickel ore per year. "Ferronickel output from SMI will be sold to Shanghai Decent Investment," said Alexander, referring to a unit of the Tsingshan Holding.
He said Bintangdelapan and Tsingshan are keen to tap the prospects of the downstream mineral sector, especially after Indonesia moved to ensure value-adding of the nation's natural resources.
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