China’s Baowu Steel Group has signed an agreement to jointly invest in a nickel pig iron (NPI) project in Indonesia with Brazilian miner Vale and China’s Xinhai Technology.
Baowu, the parent company of China’s second biggest stainless steelmaker, Tisco, will first establish a Chinese joint venture with Chinese NPI maker Xinhai, and then set up a joint venture with Vale Indonesia, with the latter holding 49% of the shares, while the Chinese companies split the remaining 51%.
“Vale and Xinhai Technology are outstanding enterprizes with important influence in their respective industries,” Baowu’s chairman Derong Cheng said, and said he hoped the joint venture would help to build a low-carbon, high-tech, and high-efficiency steel ecosystem.
The joint venture will be in Morowali on the Indonesian island of Sulawesi and has a target production capacity of 73,000 tonnes of NPI per year on a nickel-content basis via eight rotary kiln electric furnaces, Baowu said.
The project will use natural gas-fired power stations to provide energy for the smelter, to reduce carbon emissions by 60%, the company added.
China’s domestic stainless steel prices recently rose to their highest in four-and-a-half years, while NPI prices have increased for the past three weeks due to strong demand from high production levels at stainless steel mills.
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