Weda Bay: An ambitious nickel production project

After a long period of study and preparation, the Weda Bay project in Indonesia is beginning to see daylight. Origins, twists, perspectives – we take a look at a deposit like no other.

An intense research project

It all began with a discovery: a nickel deposit on the island of Halmahera, in the northern reaches of the Maluku archipelago in Indonesia. The site, believed to be one of the largest in the world, attracted the attention of Eramet, which decided to acquire the deposit. It was purchased in 2006 from Weda Bay Capitals, Inc., the Canadian company that owned the site. Thus began a long period of preliminary analysis. This immense task confirmed expectations: and in fact, the total estimate for the deposit doubled, from 4 to 9.3 million tons of nickel content. This was nothing less than the largest unexploited nickel deposit in the world. The contract, which provides for a 30-year production period, may be renewed twice for a period of 10 years. At the time, the economic crisis was in full force, with the mining industry feeling the effects as nickel and manganese prices dropped. In 2013, the Weda Bay project entered a period of slowdown, and when Mitsubishi, Eramet’s partner, decided to withdraw from the project, it was time to find a new ally.

A critical partnership

That’s when Tsingshan came in. A giant on the Chinese market and the world’s largest stainless steel company, Tsingshan signed an agreement with Eramet in 2017. The two groups shared out the roles: Tsingshan took over construction and operation of the factories, as well as the infrastructure required for production. In addition to the deposit itself, Eramet brought its invaluable mining expertise, in a region that is particularly sensitive to erosion. Following Tsingshan’s investment, Eramet owned 43% of the company that controlled Weda Bay, and Tsingshan 57%. "We bring our knowledge of the mine and offer recommendations to improve the project. In addition to the anticipated benefits, the collaboration with Tsingshan has allowed us to learn and strengthen our expertise even further." explains Martin Cezard, Weda Bay Project Director at Eramet. On the ground, the pyrometallurgical process developed for this project, which employs electric furnaces, is one of the most competitive in the world. Using the ore extracted from Weda Bay, the process will allow factories to produce low-grade ferronickel, also known as nickel pig iron (NPI), which is in high demand from the world’s major stainless steel customers.

Unexplored potential

Since Eramet and Tsingshan signed their partnership agreement, things have been moving fast. Less than a year after the start of operations in August 2018, a third of the work has been completed. "The works are progressing well. Our partners have agreed to start production at the end of 2020, but now we’re ahead of this schedule and are aiming for the second half of the year." explains Martin Cezard, Weda Bay Project Director at Eramet. Eventually, the complex will also bring in other pyrometallurgical activities using its Indonesian nickel ores. It is expected to employ some 2,000 people, with an additional 1,000 employed by the power plant. Finally, in addition to this initial development, Weda Bay could open up new opportunities for the Group, with the launch of parallel projects on the site. For this reason, Eramet teams are currently conducting studies for the development of other projects on the island, particularly those concerning nickel for batteries, which means more good prospects for the coming years.

30,000 tons of nickel content in NPI (Nickel Pig Iron)

This is the expected annual yield, including 13,000 tons for Eramet, which will handle its commercialization.