Indonesia President Launches $2.7 Billion China-backed Ferronickel Plant

Indonesian President Joko Widodo on Monday inaugurated a new ferronickel plant with 1.8 million tonne output capacity in southeast Sulawesi province built for an estimated $2.7 billion.

The plant was built by PT Gunbuster Nickel Indonesia, a local unit of China’s Jiangsu Delong Nickel Industry, at a nickel processing centre in Sulawesi, part of government plans for the resource-rich country to move up the value chain and not just export raw materials.

According to a government statement, the plant will be able to process 13 million tonnes of nickel ore annually.

Jokowi, as the president is popularly known, said the smelter will increase the value of nickel ore by 14-fold.

Establishing industries that add value is one of Jokowi’s key policy objectives to maximise returns for Indonesia’s natural resources and create jobs.

In 2020, top nickel miner Indonesia banned nickel ore exports to persuade foreign companies to invest in smelters.

The president reiterated on Monday that he would use the same approach to lure investors into processing other metals, including by banning bauxite shipments at the end of next year.

“So for those who want to build bauxite downstream industry, please do, because the opportunity (for exports) is only for one year,” said Jokowi.

(By Bernadette Christina; Editing by Emelia Sithole-Matarise)

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