PT Vale Indonesia Tbk (INCO) allocates US$195 million for capital expenditure this year.

"Its use is for sustainable capital expenditures and expansion," said the Vale 2020 annual report released on Wednesday (31/3).

For sustainable spending, the focus will be on implementing the total renovation of the 4th electric furnace, which will begin in the second quarter of this year. The company expects the construction process to take five months and the completion in November 2021.

Capital expenditures are focused on continuing mine development, replacing heavy equipment, and increasing the vertical matte processing plant's capacity.

The company also allocates costs related to the Pomalaa (Southeast Sulawesi) and Bahodapi (Central Sulawesi) development projects according to the study's progress, licensing, and negotiation processes with selected partners. Therefore, the company encourages business expansion by building three processing and refining facilities (smelters) in Sorowako, Bahodapi, and Pomalaa.

For Sorowako, the company will carry out the development plan by the work contract amendments to increase production by up to 25%. It will carry out efforts to increase this by making investments that are continuous improvement and the construction of an additional RKEF production line with an extra production level of around 10,000 tons.

With the combination of the continuous improvement project and one production line, the company expects it to achieve the production target of 90,000 tons of nickel before the work contract ends.

The company is also continuing with various development plans for the Bahodapi and Pomalaa blocks. Until the end of the reporting, the realization of the two blocks' development had entered the service study stage and the negotiation settlement process with potential strategic partners, namely the nickel processing company from China for Bahodapi and SMM Pomalaa.

The next steps will be to get approval for expansion projects in Bahodapi and Pomalaa, obtain permits and start the funding process for these two projects.