Japan's Sumitomo Metal abandons Pomalaa nickel project in Indonesia

JAPAN'S Sumitomo Metal Mining Co (SMM) said on Monday (Apr 25) it has decided to discontinue a long-running feasibility study on an Indonesian nickel processing plant project because of a disagreement with its partner PT Vale Indonesia.

The Japanese miner and smelter had been working on the study since 2012 and had expected the project in Pomalaa, Indonesia to help it boost its nickel output to 150,000 tonnes a year, up from about 81,000 tonnes.

A spokesperson for SMM said PT Vale had decided to find another partner and there had been some differences between SMM and PT Vale about construction scheduling and costs.

“We have made the decision as PT Vale had begun to consider moving forward with the project with another company and as we had not been able to continue negotiations with PT Vale,” an SMM spokesperson said.

The spokesperson declined to give details on PT Vale’s new partner.

“PT Vale Indonesia remains committed to the development of Pomalaa and we will issue a press release regarding the project within this week,” Bernadus Irmanto, the company’s chief finance officer, told Reuters on Tuesday, declining to give further details.

“SMM has concluded that it has no choice but to discontinue the study since it is difficult to maintain its internal and external project study team with no prospect for future progress,” the company said in a statement.

The feasibility study was also taking a long time as the Covid-19 pandemic has delayed procedures to obtain permits and discussions with PT Vale, the spokesperson added.

In February, SMM President Akira Nozaki said his company wanted to make an investment decision on the Pomalaa project “as early as possible”, and that the project aimed to start production in the late-2020s with a capacity of about 40,000 tonnes of mixed sulphide nickel a year.

“We will keep our long-term goal of nickel output and continue to make efforts to secure stable supply of natural resources,” the spokesperson said. REUTERS