NEWS

US & China Join in IDR 67 Trillion Vale Project in Sulawesi

A logo of the Brazilian mining company Vale SA is seen in Brumadinho, Brazil January 29, 2019. REUTERS/Adriano Machado

An automotive company from the United States, Ford Motor Co, and a nickel company from China, Zhejiang Huayou Cobalt, agreed to sign an investment agreement (Final Investment Agreement) with PT Vale Indonesia Tbk (INCO) for the construction of a nickel smelter project worth US$ 4.5 billion or around IDR 67.5 trillion (assuming an exchange rate of IDR 14,500 per US$).
The project for a processing and refining facility (smelter) using High Pressure Acid Leaching (HPAL) technology is located in Pomalaa, Kolaka Regency, Southeast Sulawesi.

This smelter will produce 120 thousand tonnes per year of Mixed Hydroxide Precipitate (MHP).

Quoting Reuters, Thursday (30/03/2023), Vale and Huayou target the construction of the smelter construction to begin in November, so that the smelter operation is expected to be realized in 2026.

Vale Indonesia CEO Febriany Eddy said this agreement was quite unique because it brought Ford a new experience in the upstream nickel business.

He said Vale would hold a 30% stake in the smelter project, while the rest would be controlled by Ford and Huayou.

“Ford can help ensure that the nickel we use in electric vehicle batteries is mined, manufactured to the same ESG standards as part of our business around the world,” said Christopher Smith, Ford’s Chief Government Affairs Officer, at the signing. (30/03/2023).

This agreement also marks Ford’s first investment in the Southeast Asian region.

Previously, President Joko Widodo (Jokowi) revealed that there were 4 world “giant” companies that were working together to work on projects in Sulawesi.

The four world companies include Vale from Brazil, Huayou from China, Ford from the United States, and MIND ID from Indonesia.

“I warmly welcome the cooperation that has been signed by 4 countries. There is Indonesia because Mind ID is a shareholder in PT Vale, there is Brazil, plus China, and also the United States,” said Jokowi in his remarks at the inauguration of the Sawerigading Wallacea Kehati Park. , East Luwu, South Sulawesi, Thursday (30/3/2023).

He hopes that the collaboration between the 4 countries can contribute to the Gross Regional Domestic Product (GDP) in the province to the district, so that it can provide welfare for the community.

“That’s what we want because those who joined were giant companies from the world. In the US Ford is the giant of cars, in China there is Huayou the giant of various industries,” he explained.

On that occasion, Jokowi did not mention what cooperation was signed. However, according to Deputy for Protocol, Press and Media Secretariat of the President Bey Machmudin revealed that the cooperation was related to nickel processing and refining facilities (smelters) in Sulawesi.

It should be noted that before Ford joined forces, Vale Indonesia and Huayou signed a framework cooperation agreement (FCA) on April 27, 2022.

The two parties have agreed on the main matters related to the HPAL smelter project in Pomalaa, one of which is that Huayou will build and implement the Pomalaa HPAL project, and PT Vale will have the right to acquire up to 30% of the shares in the Pomalaa HPAL project.

Prior to Huayou, Vale had planned to work with a Japanese company, Sumitomo Metal Mining Co Ltd (SMM) to build a smelter project in Pomalaa. But unfortunately, on April 25, 2022, Sumitomo stated that he was withdrawing from this nickel HPAL smelter project.

The production capacity of the smelter with Huayou and Ford has tripled from the previous plan with Sumitomo which targeted “only” 40 thousand tons of MHP per year.

Source: https://www.cnbcindonesia.com/news/20230330173019-4-425952/sah-as-china-join-di-proyek-rp-67-triliun-vale-di-sulawesi

Image Source: www.cnbcindonesia.com