Chief Minister Pehin Sri Abdul Taib Mahmud officiated at the earth-breaking ceremony yesterday.
OM Materials (Sarawak) Sdn Bhd chairman Low Ngee Tong said the project will be executed in two phases with Phase 1 costing at US$397 million.
“The project will not only transform the strategic, financial and fundamentals of OMH and CMS, the two project shareholders, but also will bring significant growth to the industrial development in Sarawak and the future shape of the ferroalloys industry,” he said.
He pointed out that the project will put Sarawak firmly on the map as the leading green field location for power intensive industries, supporting the growth of Malaysian and Asian economies and the regional steel industry.
“Planned production capacity for Phase 1 is 308,000 tpa (tonnes per annum) of ferrosilicon alloys, while in the second phase production is about 265,000 tpa of manganese ferroalloys and 300,000 tpa of manganese sinter ores.”
Construction of Phase 1 will begin soon and take 24 months, with first production expected in the first quarter of 2014.
It is a joint venture project between OM Materials (S) Pte Limited (80 per cent) and Samalaju Industries Sdn Bhd (20 per cent).
Low said the plant is expected to reach full production capacity of ferrosilicon by the last quarter of 2014.
“The second phase will consist of the construction and commissioning of the manganese alloys smelter with full commercial operation and steady state production expected to be reached by the middle of 2015.
“This would take the total production of OM Sarawak to 600,000 tonnes of ferroalloys with total power consumption of 500 megawatts by the middle of 2015,” said Low.
The competitive long-term power supply, proximity to at least 60 per cent of world steel production and future growth of steel production of Asian countries are unique competitive advantages, he said.
“The development of the ferroalloys smelter in Samalaju will ease the pressure of ferro silicon supply from China, which is producing more than 60 per cent of the world’s ferroalloys silicon demand,” he said.
Throughout the planning and execution of the project, he said, the company’s corporate values such as safety, the environment and corporate social responsibility would continue to play a vital role.
“Safety will be a priority as a project culture and as a core value. We aim to ensure safety will become a permanent process part of the basic attitude of our management and workforce. Respect for the environment will also be our core value.”
OM Holdings Limited was incorporated in 1997 and commenced trading on the Australian Securities Exchange (ASX) in 1998.
The group is one of the world’s largest integrated manganese producers and the third largest manganese producer in Australia by production volume.
It is one of the top 10 high-grade manganese ore producers in the world in terms of contained manganese production volume.
The group is primarily focused on the Chinese, East Asian and European markets.
It has over 14 years experience in exploration success, project development and market penetration.
With integrated operations comprising exploration, mining, processing, smelting, sintering and marketing and trading, the group is able to capture significant value and margins along the entire value chain by optimising raw material sourcing, production processes and product mix design.
The group’s three core operating businesses are the exploration and mining manganese ore in Australia, the smelter production ferro alloys and sinter ore in China and the marketing and trading or manganese, iron and chrome ores and ferro alloys in Singapore.