PT Indonesia Morowali Industrial Park (IMIP) has replaced PT Vale Indonesia Tbk (INCO) to become the largest nickel producer in Indonesia since 2018, although in 2014 Vale’s contribution to national nickel metal production reached 77%.
Largest nickel producer in Indonesia
Responding to this, Deputy CEO of PT Vale Indonesia, Febriany Eddy, said that this did not disturb the company because Vale was not focused on becoming the largest producer in the country. According to him, Vale does not only look at volume, but also several other important aspects such as employee safety, profit, and business sustainability.
Likewise from a market perspective, according to him, the goods produced by Vale are exported to Japan, so that they do not compete for market share with other producers in Indonesia. “Our business strategy does not focus on being the largest producer. If we look at Morowali over Vale, we don’t just look at volume,” he said in an interview with Poil Indonesia.
The Pomalaa smelter project
He further said that with the strategic resources and reserves in Vale’s contract of work, his party plans to invest in the Pomalaa smelter project, Southeast Sulawesi and Bahodopi, Central Sulawesi. He said that the new smelter in Bahodopi, company will partner with companies from China. This smelter will produce ferronickel and nickel pig iron (NPI) which can be processed into stainless steel.
Meanwhile, in Pomalaa, the High-Pressure Acid Leaching (HPAL) smelter will partner with a Japanese company, Sumitomo Metal Mining Co. Ltd (SMM). The products from the HPAL smelter will be suitable as raw materials for batteries.
Nickel matte from the current capacity
In addition, Vale also plans to expand its existing smelter in Sorowako, South Sulawesi with an additional capacity of around 10 thousand tons of nickel matte from the current capacity of around 73 thousand tons. “These three projects are very big. We are aware that we have to go through a partnership. We are currently completing negotiations with our partners and the licensing and financing process because these three things need time,” he explained.
He said the investment required for the three projects reached the US $ 5 billion. However, the investment will be carried out together with partners, not just the Vale portion. In the two joint venture projects, according to him, Vale will be a minority holder.
Sorowako smelter expansion project
“The investment needed for the total smelters in Pomalaa and Bahodopi which will form a JV with partners, coupled with the Sorowako smelter expansion project, reaches the US $ 5 billion. The total investment is not only from Vale itself,” he explained.
Previously, the Special Staff of the Minister of Energy and Mineral Resources for Mineral and Coal Management Irwandy Arif said IMIP is now the biggest player in the Indonesian nickel industry with a percentage of even reaching 50% since 2018. According to him, this shows the development of the nickel industry in the country is changing very quickly.
Indonesia Morowali Industrial Park
Based on Irwandy’s presentation data, in 2014 the nickel industry was still controlled by Vale by 77%, followed by PT Aneka Tambang Tbk (ANTM) at 19% and the other 3%. It didn’t take long to change the composition, in 2018 the nickel industry was directly controlled by the Indonesia Morowali Industrial Park (IMIP).
Since 2018, IMIP is said to have controlled 50%, followed by PT Vale Indonesia Tbk which fell to 22%, Virtue Dragon 11%, Harita 6%, Antam also fell to only 5%, and others by 6%.
The composition of the nickel industry
“If you look at it from here, the development we need to pay attention to is that in 2014 the nickel industry was controlled by Vale 77% and Antam 19% and others 3%, but in 2018 IMIP controlled 50% and Vale fell to 22%,” he said.
Irwandy said that, with the same composition that changed drastically from 2014 to 2018, he projects that the same conditions will repeat themselves in the future, namely in 2023. He estimates that the composition of the nickel industry in 2023 will also change drastically.
“In 2023 the composition will definitely change drastically,” he said.