Petrosea secures $954 million contract with Vale Indonesia

In a significant development for the Indonesian mining sector, Petrosea, a company backed by billionaire Prajogo Pangestu, has secured a substantial contract worth 16 trillion rupiah, equivalent to $954 million, from Vale Indonesia. This partnership aims to enhance nickel mining and transport services stemming from Vale's extensive mining operations located in Morowali, Central Sulawesi. The contract, which is set to span 10 years, was publicly disclosed through an exchange filing, indicating a strengthening relationship between Petrosea and the Brazilian mining giant Vale. Vale Indonesia's nickel mining site in Morowali covers approximately 23,000 hectares and boasts an impressive production capacity of 73,000 tons per year. The nickel ore extracted from this area will be directed to a smelter jointly operated by Vale and its business partners, highlighting the strategic importance of this venture in the region's mineral supply chain. This agreement develops a previous collaboration between the two companies, as Petrosea had already been awarded a much smaller contract worth 2.8 trillion rupiah in July 2023 for establishing a mine in the Pomalaa block, located in Southeast Sulawesi. The new contract elevates Petrosea's total order book to beyond 64 trillion rupiah by the close of 2024, signifying robust growth and diversification in its business portfolio. As one of the largest mining engineering service providers in Indonesia, Petrosea's successful bids not only reflect lucrative opportunities within the booming nickel sector but also underscore the growing demand for nickel, a vital metal for battery production, particularly in the electric vehicle industry. With an estimated net worth hitting $15 billion, Prajogo Pangestu stands out as one of Indonesia's richest individuals and a key player in the mining industry, holding substantial shares in various companies, including Petrosea and Petrindo Jaya Kreasi, which recently went public in 2023. The ongoing investments and contract wins signal potential for continued expansion within the sector as global demand for nickel, largely driven by renewable energy technologies, remains strong.