Ibris Nickel to Invest $1.8b for Refinery

By webadmin on 06:21 pm Oct 12, 2012
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Tito Summa Siahaan

Ibris Nickel, an Indonesian holder of a mining business license, plans to invest some $1.8 billion to build a refinery in Bulungan district, East Kalimantan, the company’s chief operating officer said on Thursday.

“The construction will start by the middle of next year and is scheduled for completion by 2014,” Agus Suhartono said. “We have completed the second phase of a feasibility study.”

While the company has yet to determine the best financing scheme to fund the construction, Agus said the refinery will have the capacity to produce some 40,000 tons of nickel pig iron annually. “We will also build a 4×80 megawatt coal-fired power plant nearby.”

Agus said that Ibris has coal assets with “significant amounts of reserves” near the refinery location. “It is the main reason why we build the refinery in Bulungan.”

The firm’s nickel mine is located in North Konawe district, Southeast Sulawesi, with reserves estimated at around 100 million tons, Agus said.

“Production started [in] 2010, and it currently stands at around 250,000 tons per annum,” he added.

Singapore-based Ibris Nickel is controlled by Risjadson Investment & Holdings, which is owned by the Risjad family, some of the country’s wealthiest people.

The government has enacted regulations that will ban the export of raw materials by 2014 in order to encourage miners to process their outputs domestically. IPU holders are still allowed to export raw materials, but they have to submit a plan to build a smelter in addition to complying with other requirements set by related ministries. The Ministry for Mineral Resources and Energy has received 185 proposals to build smelters, but claimed to have found an indication that most of the miners submitted proposals just to secure export permits.

“I don’t know about other miners, but for sure we will build the smelter,” said Ibris’ Agus, refuting the ministry’s claim.

On the same occasion, Thamrin Latuconsina, the director for industrial and mining good exports at the Trade Ministry, said that his office has granted 125 export permits as of Monday. “[Among those are] for nickel with 64 permits, iron with 18 permits and aluminum with 22 permits,” he said.