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Work on Halmahera Smelter to Start in 2012
Ririn Radiawati Kusuma | March 01, 2011

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Construction on a nickel smelter in Halmahera, North Maluku, is expected to begin next year, an executive said. The $4.6 billion project is a collaboration between Weda Bay Nickel, a unit of French mining and metallurgical group Eramet, Indonesian nickel miner Aneka Tambang (Antam) and Mitsubishi Corporation of Japan.

Weda Bay Nickel spokesman Yudi Santoso said on Tuesday that preparation was under way and construction on the project was expected to begin in 2012. Land acquisition is a key part of the preparation, he added.

Antam’s president director, Alwin Syah Loebis, said his company was performing a feasibility study that should be completed  by the end of this year.

The project is expected to begin production in 2017 and generate up to 35,000 tons of nickel a year during its first phase, Yudi said.

The second phase is expected to produce 65,000 tons of nickel and 4,000 tons of cobalt annually, he said, all of which will be exported to steel companies in Europe and Japan because there is no domestic demand for them.

“We need more time to build the smelter factory because it is located in a remote area,” he said.

Halmahera is located in North Maluku province, in the far eastern part of Indonesia.

The Weda Bay deposit is one of the world’s largest undeveloped nickel projects with estimated reserves of 5.1 million tons of measured and inferred ore resources.

Weda Bay Nickel owns a 60 percent stake, while Mitsubishi has 30 percent and Antam the remaining 10 percent.

Alwin said Antam planned to spend $250 million this year to finance several projects, including Halmahera, though he declined to disclose details.

Antam shares rose 3 percent to close at Rp 2,750 on the Indonesia Stock Exchange on Tuesday.