China Nickel Resources Holdings, a nickel-based steelmaker, will invest two billion yuan over the next two years to expand domestic iron ore melting capacity and build a plant in Indonesia to better use its resources.
The company, formerly China Special Steel Holdings, said it would spend one billion yuan on a new steel plant in Indonesia with initial capacity of two million tonnes and another one billion yuan to triple the capacity of its mainland mills to three million tonnes by next year.
China Nickel management unveiled the expansion plan after the firm reported first-half profit rose to 274 million yuan, up 508 per cent from 45 million yuan a year earlier on higher sale of its high-value-added stainless steel base materials.
Sales increased 237 per cent to 1.26 billion yuan. It declared an interim dividend of 4.8 HK cents a share. Shares in the company jumped 33.54 per cent to close at HK$4.38 yesterday.
The Henan-based company, which in May completed the HK$2.73 billion purchase of iron-nickel resources from its chairman Dong Shutong, said capacity at the proposed Indonesia plant would gradually increase to three million tonnes.
'The plant could better utilise the iron-nickel resources we gained and expand our business overseas,' Mr Dong said, adding that the investment had won the Indonesian government's initial approval.
The plant is located next to the iron-nickel mine at South Kalimantan where China Nickel secured exclusive rights to buy 40 million tonnes.