PT Vale Indonesia (PTVI) has partnered with Taiyuan Iron & Steel Group (TISCO), a subsidiary of China Baowu Steel Group (Baowu), and Shandong Xinhai Technology (Xinhai) to produce stainless-steel raw material nickel pig iron (NPI) in Indonesia.

The firms have signed a cooperation framework agreement to construct and operate the Bahodopi processing facility.

According to the agreement, the parties will form a joint venture (JV) to develop a nickel processing facility and supporting facilities at Xinhai Industrial Park, Morowali, Central Sulawesi.

Featuring eight lines of rotary kiln-electric furnace ferronickel processing capacity, the Bahodopi facility is estimated to have an annual production of 73,000mt of nickel.

While PTVI will have a 49% stake in the JV, Baowu and Xinhai will jointly own the remaining 51% interest.

The facility will also source electricity from a gas-fired power plant for the processing of smelting to reduce carbon emissions.

PT Vale Indonesia CEO Febriany Eddy said: “We appreciate that our partners have joined us in our low carbon agenda, agreeing to switch from coal to gas-fired power plant.

“We believe this agreement is evidence of alignment of our sustainability commitments, which is extremely important for PT Vale. We are confident that the three parties will serve as a good complement for each other.”

Said to be the world’s biggest nickel ore miner, Indonesia banned the export of the mineral from early-2020.

The aim was to encourage the development of local processing plants.