INNOVATIVE FINANCING SCHEME TO INVEST IN CLASS 1 NICKEL SMELTER USING NEW HYDROMETALLURGICAL TECHNOLOGY

• Main Author: Ramadhani, Romy
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/57644
• Institution: Institut Teknologi Bandung

PT Trimetals Energy Indonesia ("TRIO"), is a public company established in 2009 and has experience in the smelter and refinery industry ore-galena into Pb that can be used for conventional vehicle battery materials. Apart from these operational activities, the Research and Development ("R&D") process has been conducted from the beginning to develop the nickel ore extraction process through a hydrometallurgical process called Step Temperature Acid Leach ("Hydro"). Hydro Technology™ is capable of producing intermediate products in the form of Mixed Hydroxide Precipitate ("MHP") with a nickel content of 30% - 40% that can be further developed to be processed into electric vehicle batteries. In May 2021, Hydro Technology™ was recognized by The Research Institution and The Government Agency with recommendations worthy of commercial development ("Hydro Project"). However, TRIO is not in an easy business condition in obtaining funding to build the Hydro Project, it requires an innovative financing scheme to be structured. The method used in this final project uses quantitative method reinforced secondary data, the process of assessing the feasibility of the project using discounted cash flow valuation ("DCF") method to show the feasibility level of Hydro Project by determining some parameters that contribute significantly to the assessment figures through sensitivity analysis method. It is also noted that Hydro Technology™ is a new process, and the author does not yet have a comparison to assess and the Company has not built the industrial scale of this project, thus becoming the limitation of this final project. The feasibility value of the Hydro Project is divided into two schemes, which will be used as an investment offer option namely Scheme-A (base case) and Scheme-B (low case), where each scheme show net present value ("NPV") of USD 120,288.0 and USD 91,162.3 at discounted interest rates of 10% and 14%, average Profitability Index ("PI") 3.3x and 2.5x. The 3.2-year Payback Period ("PBP") and the Internal Rate of Return ("IRR") rate of 32.4%, with an initial investment of USD 40 million, are eligible for the commercial phase. Assessments have also been conducted on Hydro Technology™, where the NPV results are also divided into two scenario of Schemes-A and Scheme-B amounted of USD 80,288.0 and USD 51,162.3, respectively with discounted interest rates of 12.3% and 14.8%. The range of proceeds from the valuation will be used for the Company as the basis for the initial deposit capital value to prospective Joint Venture ("JV") companies along with prospective private equity investors. The Company is recommended to get a Scheme-A deal or at least close, it is important to maintain an initial majority ownership rate of 66.7% compared to Scheme-B of 56.1%.