PT Vale Indonesia and Zhejiang Huayou Cobalt have signed a framework cooperation agreement ( FCA ) for developing a high-pressure acid leaching ( HPAL ) nickel processing facility in Sulawesi.

Huayou will construct and implement the Pomalaa HPAL Project, and Vale will have the right to acquire up to 30% of the shares. The plant is located in Kolaka, southeast Sulawesi.

The deal follows the withdrawal from the feasibility study by Sumitomo Metal Mining, which cited long delays in moving the project forward with Vale.  

Huayou has a proven track record in HPAL construction and operations in Indonesia. The FCA was signed by Vale chief executive officer Febriany Eddy and chief financial officer Bernardus Irmanto, and Huayou chairman Xuehua Chen.

Pomalaa HPAL will adopt and apply Huayou's HPAL process, technology and configuration to process the limonite ore and low-grade saprolite ore from Vale’s mines in Pomalaa, to produce mixed hydroxide precipitate ( MHP ) product, with a potential production capacity of up to 120,000 metric tonnes of nickel per annum.

The parties will sign definitive agreements no later than six months after the signing of the FCA. Construction, already started through early works done by Vale, will continue and accelerate with the cooperation agreement. The aim is to complete construction within three years.

Both companies will work together to minimize the carbon footprint of the project, and have agreed not to use captive or dedicated coal-fired power plants for any power source for the project.

According to its latest production report, Indonesia Stock Exchange-listed Vale produced 13,827 metric tonnes of nickel in matte in the first quarter of 2022.

Vale mines laterite nickel ore and processes it into the final product of nickel in matte. Average volume of nickel production is 75,000 metric tonnes per year.

Much of the nickel currently produced is exported to Sumitomo Metal Mining under a long-term contract.