Vale allocates US$150m capex for 2012 expansion projects

Vale Indonesia, formerly known as Inco Indonesia, will allocate capital expenditure of about US$150 million this year to finance expansion projects in the company?s nickel mines in Sulawesi, Bisnis Indonesia reported Friday.

The company?s president director Nicolaas D. Kanter said in Makassar on Wednesday that the new investment would be needed to finance expansion projects which would be gradually carried out this year.

?This year, we allocate about US$150 million in capital expenditure to finance projects to increase production and to build a smelter,? Kanter said following a meeting with South Sulawesi Governor Syahrul Yasin Limpo.

In the long run, Vale Indonesia would invest about US$2 billion to finance projects in order to increase the production capacity.. The projects which will include the expansion of mining areas and the construction of new smelter and furnace will be carried in stages of between 5 years and six years.

With such expansion projects, total production is expected to increase from 72,000 tons at present to 90,000 tons in next three years and to 120,000 tons in next five years, Kanter said. Besides building a new smelter, the company would also build new furnace to support the production capacity. At present, Vale operates five furnaces at its mining areas in Sulawesi. (*)