Tsingshan eyes first Indonesian nickel pig iron output in Jan – by Fergus Jensen and Melanie Burton (Reuters U.S. – September 4, 2014)


JAKARTA/SYDNEY – (Reuters) – China’s Tsingshan Group expects to start production at its Indonesian nickel pig iron smelter as soon as January, becoming the second plant to ramp up since the country’s new mineral processing laws came into force at the start of the year.

“Hopefully by October or November we will have started commissioning,” said Slamet Panggabean, finance manger of Tsingshan’s local joint venture partner Bintang Delapan Mineral, referring to the firm’s pilot smelter project in Morowali on the Indonesian island of Sulawesi.

“The plan is for production (to begin) in January or February.” As part of a strategy to reap more value from its mineral wealth, Indonesia banned ore exports in January as it pushed its nickel and copper miners to set up metal processing plants. The move has driven up London Metal Exchange nickel prices by a third so far this year.

Stocks of nickel pig iron at China’s stainless steel makers are running down, leaving them exposed to a supply gap next year and fuelling the need to build smelters in Indonesia as quickly as possible.

Tsingshan, China’s second largest stainless steel company, was one of the few firms to act when the law was enacted in 2009 and is well ahead of other nickel pig iron producers, many of which held back on hopes the ban would be rolled back.

Output at the joint venture, Sulawesi Mining Investment, is expected to ramp up slowly and is unlikely to reach name plate capacity of 300,000 tonnes of nickel pig iron in the first year Panggabean said.

The group is currently preparing foundations for the planned second phase of the project, he added. This would add a further 600,000 tonnes of output capacity to the facility, which was partly funded by a $384 million loan from China’s policy lender State Development Bank.

Some production could even start as early as October, two sources told Reuters.

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