Australian Nickel Processor Eyes Indonesian Ore Piles – by James Regan (Jakarta Globe – March 18, 2014)

Perth. At a small plant on the outskirts of Perth, metallurgists have been turning raw ore shipped from top Indonesian nickel miner Aneka Tambang (Antam) into a concentrate to meet the country’s new export guidelines.

After a year of tests, Australia’s Direct Nickel says it has now entered into a joint venture with Antam for a feasibility study on building a full-scale plant on Indonesia’s Halmahera island using its new nitric acid-based technology.

The agreement comes as Antam struggles to meet Indonesia’s tough new export rules, which prevent the company from shipping raw mineral ore to Chinese nickel pig iron producers and instead demand it processes the ore before export.

“We could not have asked for a better time to start planning our first commercial plant in Indonesia,” said Direct Nickel Chief Executive Russell Debney. Antam has warned its nickel ore production could fall by as much as 87 percent this year as sales to China dry up due to the ban.

“What they want now is cheaper alternatives to enable them to apply to the government for concessions to keep exporting,” Debney said.“We are looking at building a 20,000 metric tons per year plant, possibly in two 10,000 metric ton components.”

The catch will be the cost.

Direct Nickel needs $500-$700 million to build the first full-sized plant, although Debney said it is looking jointly with Antam for investment funding and notes that a conventional smelter could cost four or five times as much.

Poor record

Nickel mining has a poor record of delivering on promises, with cost blowouts and delays commonplace among companies introducing untried technologies, leaving investors wary.

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