Japan-based Sumitomo Metal Mining has decided to withdraw from an ongoing feasibility study on a nickel refinery project in Indonesia due to partnership difficulties with PT Vale Indonesia.

The two companies have been conducting a definitive feasibility study for the project since 2018. Located in in the Pomalaa area of Kolaka Regency in the Southeast Sulawesi Province, the refinery was to be the centerpiece of Sumitomo’s strategy to boost its nickel output to 150,000 tons per year. 

“However, due in part to the spread of COVID-19, procedures to obtain permits and discussions with [Vale Indonesia] were delayed,” said Sumitomo. This caused Vale Indonesia to search for alternative partners to move the project forward. 

“Since it is difficult to maintain its internal and external project study team with no prospect for future progress, Sumitomo Metal Mining has concluded that it has no choice but to discontinue the study.”

Sumitomo said that its exit will have minimal impact on its financial results and it will continue efforts to secure nickel resources to strengthen the value chain of its business units. 

Source: Sumitomo Metal Mining