Trimegah Bangun Persada

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Harita Nickel boosts North Maluku's economy to the highest in Indonesia

20 November 2023

CNBC Indonesia - Superior processing technology developed by PT Trimegah Bangun Persada Tbk (NCKL), or Harita Nickel, is helping North Maluku province's economic growth to become the highest in the country.

According to data from the Central Statistics Agency (BPS), North Maluku achieved the highest annual economic growth record in Indonesia at 23.89% in the second quarter of 2023.

One of the drivers of North Maluku's economic growth is the remarkable performance of the mining and excavation sector, which grew by 64% (yoy), followed by the manufacturing sector, which grew by 48.12% (yoy).

In terms of employment, mining excavation, and manufacturing cumulatively contributed more than 50% to the structure of North Maluku's gross regional domestic product (GRDP) in the second quarter of 2023.

On a quarterly basis, both industries experienced the highest growth in the business sector, with mining and excavation at 23.24%, followed by manufacturing at 15.71%.

The remarkable growth of GRDP in various business sectors (%QoQ)

Source: Central Statistical Office (BPS)

This impressive growth is certainly not without reason. Harita Nickel's role as one of the nickel players with integrated processing technology has contributed to the economic growth of North Maluku.

Harita Nickel operates nickel mines on Obi Island, South Halmahera, North Maluku Province. The mine has been in operation since 2007 and has been consistently transforming to advance nickel industrialization.

The company's nickel industrialization efforts began with the establishment of the first Rotary Kiln Electric Furnace (RKEF) technology smelter in 2017, which produces ferronickel as a raw material for stainless steel.

The value-added project for nickel, which will benefit Indonesia, particularly North Maluku, has been designated as a national strategic project for the Obi Island Industrial Zone in 2020.

The following year, Harita Nickel once again demonstrated its pioneering spirit in advancing the nickel industry by establishing a refinery to purify limonite nickel ore (low-grade nickel ore) using High-Pressure Acid Leach (HPAL) technology. At that time, Harita Nickel's refinery produced an intermediate product, Mixed Hydroxide Precipitate (MHP), consisting of nickel and cobalt.

The refinery using this technology was the first to operate in Indonesia, and the refined nickel is said to have a lower carbon footprint and is in matte form, making it easier for further processing.

In October 2022, Harita Nickel inaugurated its second RKEF smelter with a production capacity of 95,000 metric tons of nickel per year. This will bring the total number of ore processing and refining facilities operated by the state-owned company to three, using two different technologies, RKEF and HPAL.

Harita Nickel did not stop there. Eight months later, exactly at the end of June 2023, Harita Nickel successfully continued the industrialization of nickel by refining MHP into the next derivative product and made its first export for nickel sulfate (NiSO4). In July 2023, it successfully produced and made its first export for cobalt sulfate (CoSO4).

The success of nickel sulfate production once again makes Harita Nickel a pioneer in Indonesia and the world's largest nickel sulfate plant with a production capacity of up to 55,000 metric tons of nickel per year. This outstanding record positions Indonesia as an increasingly important player in the global electric vehicle battery industry.

The latest news is that the construction of RKEF's third smelter is underway and is expected to be officially commissioned in 2025. In addition, the second HPAL refinery will be accelerated to be operational by the middle of next year.

The rapid development of the plant in recent years has also increased the demand for labor in Indonesia and North Maluku.

Speaking of employment absorption, there are currently more than 20,000 employees at Harita Nickel, 85% of whom are Indonesian citizens and 50% of whom are from North Maluku.

This nickel industrialization initiative is also increasingly showing tangible results in the performance of North Maluku's nickel exports. In the first six months of this year, nickel export growth increased by 46.69% year-on-year to US$833.01 billion. In the same period, the volume also increased significantly from 105.99 billion kilograms to 157.79 kilograms, jumping by 48.86% YoY.

The attractive performance of nickel exports also supports North Maluku's trade balance, which remains in surplus at US$3.23 billion, despite a decline in the province's total export and import performance by 7.67% and 10.27% respectively compared to last May, according to data from BPS.

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