JAKARTA/SYDNEY, Sept 4 (Reuters)-
China Qingshan group is expected to start production in Indonesia's nickel-iron smelting plant as early as January, becoming the second additional plant since the country's new mineral processing law came into effect at the beginning of this year.
"Hopefully by October or November, we will start a trial run," said Slamet Panggabean, financial manager of Bintang drumpan mining, a local joint venture partner in Qingdao, refers to the pilot project of the company's smelting plant in molovali, Sulawesi, Indonesia.
"The plan is production (to begin)
January or February
"As part of a strategy to gain more value from mineral wealth, Indonesia banned ore exports in January as it pushed nickel and copper miners to set up metal processing plants.
Nickel prices on the London Metal Exchange have risen third this year.
The nickel cast iron stocks of Chinese stainless steel manufacturers are decreasing, leaving them facing a supply gap next year and fueling demand to build smelters in Indonesia as soon as possible.
Qingdao, China's second-largest stainless steel company, was one of the few companies to take action when the law was enacted in 2009, far ahead of other nickel cast iron producers, many of whom had hopes of lifting the ban.
Production of the joint venture, Sulawesi mining investment, is expected to grow slowly, with pangaba saying in the first year that the company is unlikely to reach the nameplate capacity of 300,000 tons of nickel iron.
He added that the group is currently preparing for phase 2 of the planned project.
This will add 600,000 tons of capacity to the facility, which is partly funded by a US $0. 384 billion loan from the National Development Bank of China's policy lending institution.
Two sources told Reuters that some production may even begin as early as October. “(They)
The facilities have been tested last month, so I think production in October is possible, "said a source familiar with operations but not entitled to speak to the media.
According to people familiar with the matter, the competitor PT Cahaya modern metal industry company started production at the end of 2013 and has already started exporting to China.
PT Indoferro, another producer, started production of NPI in 2012, and a company official said the company is expected to complete an expansion project by the end of 2015, the project will increase the production of nickel from 12,000 tons per year to 8,000 tons.
Vale Indonesia processes all its nickel ore at four smelters in South Sulawesi with a capacity of more than 70,000 tons, while Indonesia's second
PT Aneka Tambang, the largest producer of nickel (Antam)
Exports from three nickel-iron smelters.
Stainless steel manufacturers in China have basically turned to low grade Philippine ore, which they are mixing with inventory in order to keep them going.
This week, a Philippine senator urged the country to halt exports of unprocessed minerals.