Chinese companies are investing in a $5-billion industrial plant in Indonesia with ferronickel and nickel pig iron smelting facilities, an executive at the Indonesian Chamber of Commerce and Industry has confirmed.

The plant will be set up in Indonesia’s Bantaeng regency, South Sulawesi.

Vince Gowan, deputy chairman for productivity improvement at the Indonesian Chamber of Commerce and Industry, said that eight Chinese smelters will be part of the project, confirming a local media report.

Construction at the plant begins in July and smelter construction will be under way in 2016, Gowan said.

Each smelter will be able to process 1.2 million tonnes of nickel ore per year, giving them a combined annual capacity of about 10 million tonnes, Gowan added.

The stainless steel market in Indonesia is weak, so the nickel pig iron produced by the plant will be also exported globally, he said.

The investors in the smelting plants include China’s nickel pig iron producer Xinhai Technology and Mex International, according to a report in the Jakarta Post.

Miners such as Beijing 21st Century Resources Investment and Asia Pacific Iron Corp will produce iron concentrate and nickel ore in the area, the report said, adding that state-owned China Harbour Group will develop supporting infrastructure.

Speaking about the Indonesian government’s ban on ore exports, Gowan said that the restriction on nickel ore exports is likely to stay, while copper concentrates exports may be allowed. 

On Friday June 6, Metal Bulletin reported that copper concentrates exports from Indonesia may begin by mid-June. 

Deepali Sharma