Indonesia’s PT Central Omega Resources plans to build a 300,000-tonne per year nickel pig iron plant in Central Sulawesi’s North Morowali regency along with Chinese partner Macrolink Group.

“The groundbreaking ceremony took place on June 14 and the smelter will produce NPI with minimum 9% Ni content,” the company told Metal Bulletin this week.

The plant will require an investment of $400 million, with commissioning expected to take around 18 months, the company said.

Construction will be carried out in three phases, with an investment of $140 million in the first phase and the remaining $260 million in the other two phases.

NPI produced from the plant will be exported to China, the company said.

The first stage is expected to finish and commence production by 2016, with initial production capacity of 100,000 tons of NPI per year, according to the company website.

In April this year, the first nickel pig iron shipment of 22,000 tonnes from Tsingshan Group’s plant in Indonesia was exported to China.

The plant is a collaboration between the Chinese firm and Indonesia’s PT Bintang Delapan.

The construction of smelters producing NPI, a cheaper alternative to refined nickel used in China to produce stainless steel, was triggered last year when Indonesia banned exports of ore.

Nickel prices on the London Metal Exchange rose sharply after news that a similar step to promote domestic processing of minerals was being mulled by the Philippines.

Prices, however, have receded since the mid of last year, falling below $13,000 per tonne this year.

Last month, Australian nickel miner Mincor Resources said it may cut production later this year if nickel prices continued to stay weak.

Deepali Sharma