Australian company Nickel Mines has increased its ownership of an under-construction nickel pig iron plant in Indonesia to 60 per cent for US$70 million.
The purchase price is fully funded by proceeds from the Nickel Mines’ IPO and its interest in the 2-line Rotary Kiln Electric Furnace (‘RKEF’) plant currently under construction within the Indonesia Morowali Industrial Park (‘IMIP’).
Nickel Mines also has a 12-month call option from the date on which the first nickel pig iron is produced from the RKEF plant to increase its ownership of the RKEF plant to 100 per cent for an additional US$120 million.
As reported in the Chairman’s letter of 20 August 2018, construction of the RKEF plant is progressing well with a majority of the foundation work and support structures for the rotary kilns and electric furnaces nearing completion.
The material capital equipment components of the RKEF plant, including the rotary kilns and electric furnaces, are now being fabricated in China and will be transported to storage facilities at Fu’an, Fujian in China for shipment to the IMIP towards the end of the year ready for installation. It is currently anticipated that commissioning of RKEF plant will commence ahead of the contractual schedule in the June 2019 quarter.
The Nickel Mines has also been issued the Ijin Mendirikan Bangunan (Building Construction Licence) by the Head of Investment and One Stop Services Office of Morowali Regency, in support of the construction of the 2 RKEF lines and supporting infrastructure.