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Silkroad Nickel Inks Pact to Operate Nickel Pig Iron Smelter in Sulawesi in Indonesia

Metal News - Published on Mon, 09 Dec 2019

Image Source: Silkroad Nickel
SGX listed Indonesian nickel mining group Silkroad Nickel Ltd announced that, together with its subsidiary PT Teknik Alum, has signed a binding definitive head of agreement with Renewable and Sustainable Energy Holding Pte Ltd, PT Artabumi Sentra Industri and PT Anugrah Tambang Smelter to form a joint venture to build and operate smelter facilities for the production of nickel pig iron at group's mine site in Sulawesi in Indonesia. Silkroad and R&S will set up a joint venture and will enter into a shareholders' agreement to give effect to their intentions and to record and regulate their relationship inter se and in the conduct of the business and affairs of the New Co on the terms and subject to the conditions set out in the New Co. Silkroad will be the majority shareholder of the New Co.

New Co intends to enter into an operating agreement with PT ASI to operate, with the option to purchase, twelve blast furnaces and ancillary equipment for the production of NPI. The total amount payable by the New Co is USD 30 million and the payment terms are to be mutually agreed by the parties. Any of the New Co, Silkroad or PT TAS will have the option to acquire the blast furnaces from PT ASI, upon full payment of USD 30 million, at no further cost or payment.

Pursuant to the PT ASI Operating Agreement, the New Co or Silkroad shall acquire three 7.5 MW power plants and the corresponding ancillary equipment to supply power to the Blast Furnaces for a maximum price of USD 20 million payable by way of new ordinary shares in the share capital of Silkroad at an agreed price of SGD 0.725 per Silkroad Share. The Silkroad Shares will be issued upon commissioning of each set of up to four blast furnaces required to power one power plant, subject to the conditions to be set out in the PT ASI Operating Agreement. The value of the power plants and the corresponding ancillary equipment to supply power to the blast furnaces will be determined by an independent third party to be mutually appointed the Parties.

PT TAS intends to enter into a nickel ore supply agreement with the New Co or if required, PT ASI, and PT TAS intends to provide a guarantee on the quality and quantity of nickel ore necessary for the operation of the blast furnaces

Silkroad or PT TAS intends to acquire 100% of the shareholdings in PT ATSM and will enter into a shareholders' agreement to give effect to their intentions and to record and regulate their relationship inter se and in the conduct of the business and affairs of PT ATSM on the terms and subject to the conditions set out in the PT ATSM SHA

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Posted By : Arun Huidrom on Mon, 09 Dec 2019
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