The Current Status Of The Gag Island Nickel Laterite Project

P. T. Pacific Nikkel Indonesia (PTPNI) was incorporated in Jakarta, Indonesia in February, 1969 by a group of Dutch and North American companies. At the same time, a Contract of Work with the Government of the Republic of Indonesia was signed, granting Pacific Nikkel all the necessary licenses and permits to explore and develop all nonradioactive minerals in two separate areas in Irian Jaya, eastern Indonesia. Nickel mineralization occurrences were confirmed by Dutch geologists in the two areas in 1952 and 1955, however, detailed exploration began in June 1969 after the Contract of Work was signed. Since that time, numerous studies and investigations have been conducted to determine the feasibility of producing metallic nickel in Irian Jaya. Four engineering studies, two bulk sample tests, an oceanographic survey, and a preliminary site investigation indicated that construction and operation of a nominal 100 million pounds per year metallic nickel plant on Gag Island were technically feasible. The fourfold increase in the price of oil in late 1973 without a corresponding adjustment in the price of nickel necessitated a reevaluation of the project, the results of which showed that the project required other conditions to be viable. Subsequently, analysis of: the future projected nickel supply-demand and cost-price relationships, the economics of treating a higher grade feed, and participation by the Government of Indonesia, indicate that the project will be viable. Therefore, planning of the Gag Island Nickel Laterite Project is continuing with the objective of commencing production to supply the market in the 1983-1984 time period.