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BPS and BI Applaud Harita Nickel's Mining Downstream Implementation

25 May 2024

Jakarta, CNBC Indonesia - Nickel downstreaming has become a leading sector for North Maluku Province as the region with the highest economic growth rate in Indonesia in the last three years. Operating on Obi Island, South Halmahera, Harita Nickel, an integrated nickel mining and processing technology firm, has played a pivotal role in this achievement.

Head of the Central Statistics Agency (BPS) of North Maluku Province, Aidil Adha, highlighted the significant role of the nickel mining and processing industry in driving regional economic growth. He pointed out growth rates of 16.79% in 2021, 22.94% in 2022, and 20.49% in 2023. Additionally, the mining experienced the highest production growth at 49.07%, while exports took the lead in expenditures, comprising 28.67%. He stated this during a joint visit with BPS and Bank Indonesia (BI) to Harita Nickel's operational area.

Furthermore, Aidil highlighted Harita Nickel as a leading example of mining and downstream enterprises committed to sustainable business practices. From employing cutting-edge, eco-friendly production techniques to effectively managing social aspects, which have been proven to have a positive impact on the surrounding community.

Aidil was surprised that North Maluku's recent economic growth didn't involve Cobalt Sulphate (CoSO4), despite Harita Nickel's successful production of it in the latter half of 2023. With the introduction of this Mixed Hydroxide Precipitate (MHP) derivative product, he expects even more growth for North Maluku's economy.

"We receive numerous inquiries about North Maluku Province's remarkable economic growth. People often question the data supporting such substantial progress. However, it seems this growth is set to continue, especially with the addition of another derivative product, Cobalt Sulfate, alongside Nickel Sulfate," he explained.

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BPS and BI Malut delegation visiting MSMEs assisted by the company in Soligi Village.

For information, Nickel Sulfate (NiSO4) and Cobalt Sulfate (CuSO4) are the two main components for making electric vehicle battery cathodes, which represent a newer, more environmentally friendly energy source.

Similarly, Hasiando Manik, Economist of Bank Indonesia South Sulawesi cited Harita Nickel as an ideal example of downstream practices benefiting both regional economic growth and local communities. He noted the company's ability to transform previously unused materials into valuable products as a significant asset for Harita Nickel.

"Harita Nickel has turned limonite, once considered low-value overburden, into valuable material for electric vehicle batteries. This aligns with good mining principles, specifically mineral conservation, and proves to be an efficient and profitable business strategy." he explained.

Contributions Outside the Mining Sector

Apart from visiting the smelter and refinery, the BI and BPS delegation also met with beneficiaries of the company's community development and empowerment program (PPM) on Obi Island. These include groups of farmers, fishermen, and MSMEs whohave received support from the company.

Despite its substantial contribution to regional economic growth, Aidil reminded that Harita Nickel could also help the government revive the agricultural and fisheries sectors, which local communities have started to neglect. He highlighted that people's welfare isn't solely determined by income but also by purchasing power, particularly concerning food commodities like rice, chilies, and tomatoes, which frequently experience price fluctuations leading to inflation.

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The group visited a refinary plant that processes Mixed Hydroxide Precipitate (MHP) intermediate products into Nickel Sulfate and Cobalt Sulfate as the main material for manufacturing electric vehicle battery cathodes.

"Although income may rise, increased demand for food may lead to higher prices as imports become necessary. However, I've noticed that Harita Nickel is diligently implementing empowerment programs in agriculture," he stated.

Tonny Gultom, Harita Nickel's Director of Health, Safety, and Environment (HSE), noted that their company, initially focused solely on mining, now operates a mineral processing industry aligned with the government's downstream policy. Heemphasized the substantial impact of this policy, which adds significant value to their operations.

"What we're witnessing today is the outcome of our efforts over the past five years. Initially, we only mined. Now, with down-streaming, our operational plans are more extensive and complex, offering greater added value to local and regional communities," he elaborated.

Harita Nickel is transforming it into the Obi Industrial Area, supported by obtained permits. Not only will production capacity increase, but they'll also push production further downstream. For instance, the ferronickel produced by the Rotary Kiln Electric Furnace (RKEF) smelters will be processed into stainless steel in the future. On the environmental front, we plan to shift electricity sources from fossil fuels to renewable energy through Solar Photovoltaic Power Plant (Solar PV) in stages, starting this year. (Source:CNBC Indonesia)

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