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Jakarta. Vale Indonesia, the country’s largest nickel producer, has set its net income target at $112 million this year, according to a document presented during a hearing with members of the House of Representatives Commission VII overseeing mineral affairs.
The local outfit of Brazil’s Vale targets production of 79,691 metric tons of nickel matte this year, a slight increase from last year’s target of 79,500 tons, which is set to be missed due to operational disruption in the fourth quarter, the document showed.
“We expect to book sales of $1 billion, assuming that the price at the London Metal Exchange averaged $16,000,” Vale Indonesia president director Nico Kanter said at the parliament building.
The company may have missed its target of $213.6 million in net income last year due to a sharp decline in nickel prices, according to Nico.
The average nickel price for last year was $15,000, down from an average of $17,374 in 2012. He said the price of nickel is projected to recover this year thanks to the government’s decision to ban exports of unprocessed nickel ore, but trends for the first few months still showed price fluctuations.
“China, the largest buyer of nickel, is still waiting to see signs on wether Indonesia will be consistent on the ban,” Nico said.
Vale Indonesia plans to invest $4 billion to build a new refinery as well as expanding its existing plant, he said.
Vale is currently renegotiating its contract with the government. Nico said the new contract may be signed in the first quarter of this year, with the company preparing to cut the size of its operational area by as much as 44 percent.
Vale has a contract over 190,512 hectares in South, Central and Southeast Sulawesi.
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