PT Vale Indonesia (PTVI), a subsidiary of Brazilian multi-metals mining group Vale, plans to power all its Indonesian operations through liquefied natural gas (LNG) by 2030 as it aims to cut its carbon emissions, according to chief executive Febriany Eddy.
Speaking at the Nickel Producers, Processors and Buyers Conference in Jakarta on 13 July, Eddy confirmed that PTVI's Bahodopi project in Morowali Regency, central Sulawesi, a ferronickel-production plant currently under construction, will be exclusively powered through LNG, with most of its other Indonesian assets also moving to natural gas in a phased manner by 2030.
"We see natural gas as the first step in transitioning away from coal as part of our commitment to reduce Scope 1 and 2 emissions by 33pc by 2030," Eddy said.
Current nickel extraction technology in Indonesia is associated with high carbon emissions, generated from burning kilns that use coal-powered electricity. The average carbon footprint of nickel pig iron (NPI), Indonesia's main nickel product, runs to up to 70t CO2 per tonne of nickel equivalent. There are currently 27 operational nickel smelters in operation in Indonesia, scheduled to rise to 81 over the next few years on the back of a $4.2bn investment in the country, with the majority of the new capacity coming on line scheduled to enter production using pyrometallurgy.
With natural gas also being a fossil fuel, Eddy said PTVI's decision to pivot towards LNG was taken from the point of view of lowering emissions from current levels rather than a more comprehensive reduction through the use of renewables.
"If we do it right, emissions can be halved compared to coal power," Eddy said."We felt that we must rely on proven technology for the 2030 goal as there isn't much time now, and we continue to work in parallel to find a long-term solution."
PTVI uses hydropower through the majority of operations at its Sorowako project in south Sulawesi, which mines laterite nickel ore and processes it into nickel matte. The project's furnaces run on 100pc hydropower and its dryer and kiln run on a mix of hydropower and coal. But this cannot be replicated elsewhere because of the geographical location of Vale's other assets, Eddy said.
"If we had the potential to do more hydro, we would do it, but the big problem is that its use is location-based," she said. "But we will switch 100pc of our dryers to LNG by 2028, which will be followed by the kilns."
PTVI is also looking at utilising other sources of electricity for use at one or more of its assets.
"We are looking at solar power as well but it is more for auxiliaries than the main equipment itself," she said.
Commenting about the collapse of benchmark nickel trading on the London Metal Exchange (LME) in March, Eddy stated that while Vale has no immediate plans to cease using the LME contract as a reference, PTVI is reviewing the possibility of looking at other sources of price discovery.
"No doubt there is a loss of trust, our offtakes are still based on LME but what happened has certainly opened up many discussions," she said.
