SGX-Catalist listed Silkroad Nickel Ltd, an Indonesian nickel mining group, has entered into a non-binding memorandum of understanding (MOU) with Shandong Xinhai (Singapore) Pte Ltd, a subsidiary of Shandong Xinhai Technology Co Ltd. Under the MOU, Shandong Xinhai is proposing to build and operate a Rotary Kiln Electric Furnace (RKEF) which will be supported by a coal-fired power plant in Indonesia for the production of up to 400,000 t/y of ferronickel. The parties to the MOU have entered into exclusive discussions to form a partnership for the development and operations of the RKEF smelter facility for mutual benefit.
Hong Kah Ing, Executive Director and Chief Executive Officer of Silkroad Nickel commented: “We are pleased to have signed this MOU with China’s largest producer of nickel alloy. Shandong Xinhai is the only enterprise in China capable of co-producing electricity and ferronickel, with a production capacity of 10 billion kilowatt hours of electric power and 1.9 Mt/y of ferronickel, which accounts for over 50% of China’s total market share. Shandong Xinhai has a permit to operate a RKEF smelter facility which meets the stringent environmental standards required in China and which can co-produce ferronickel alloy and generate electricity with a 1.4 gigawatt coal fired power plant. Silkroad Nickel shall be supplying the nickel ore required to operate the RKEF smelter facility and may consider investing in the Investment Company for the RKEF smelter facility. This would mark a further step towards our Group’s strategy of becoming an integrated nickel mining company.”