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Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.
 
Project Name PT Weda Bay Nickel (Indonesia)
Guarantee Holder Mitsubishi Corporation,Eramet SA,Strand Minerals (Indonesia) Pte.Ltd
Investor Country France,Japan
Host Country Indonesia
Sector Mining
Gross Exposure ($million) 207
Fiscal Year 2010
Status Proposed
Project Number 8113
Environmental Category A
Date SPG Disclosed April 28, 2010
Project Board Date June 29, 2010
ESRS ESRS for PT Weda Bay Nickel Project Feasibility Study in Indonesia
ESRS for PT Weda Bay Nickel Project Feasibility Study in Bahasa Indonesia
 

This summary covers investments by Eramet of France and Mitsubishi Corporation of Japan in the PT Weda Bay Nickel project in Indonesia. The investors have applied for a MIGA guarantee of $207 million for a period of up to three years against the risks of expropriation, breach of contract, and war and civil disturbance.

During this period it is anticipated that approximately $230 million will be invested for the engineering and feasibility studies necessary to conclude a bankable feasibility study for the operation of a nickel- cobalt mine with a hydrometallurgical processing plant on Halmahera Island. Once the studies are complete, an investment decision will be taken by the board of Eramet on whether to continue developing the mine and building a processing plant. It is anticipated that the final investment decision should be made before the end of 2012.  

The core project will require large capital expenditure of several billion dollars to develop the mine and the processing plant. In addition, in order for the mine to be commercially feasible, additional capital expenditure will have to be undertaken on the associated transportation infrastructure including roads, airport, and port.

Environmental Categorization

The project is a Category A under MIGA’s environmental and social review procedures.

Click here to view the Environmental and Social Review Summary and here to view the Environmental and Social Impact Assessment.

Development Impact

The Weda Bay deposit is one of the largest undeveloped nickel projects with 5.1 million tons of nickel contained in measured, indicated, and inferred ore resources.  Should this project be developed it will allow Indonesia to become one of the world’s major nickel producers. It will provide significant employment, both during construction and when in operation, major government revenues, and will have a major impact on the local economy, in particular for the remote and rather underdeveloped North Maluku Province. It will provide an important demonstration of how a major natural resource can be developed in Indonesia in a socially and environmentally sustainable way, and of benefit to the Indonesian people.

MIGA’s support for this investment is aligned with the World Bank Group’s country partnership strategy for Indonesia for 2009-2012, particularly with regard to making Indonesia’s private sector a driver in broad-based growth, and increasing the country’s competitiveness regionally and globally.

For additional information on this proposed project, please click here.

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