OM Sarawak to invest in Samalaju sinter plant

KUCHING: OM Materials (Sarawak) Sdn Bhd (OM Sarawak) is planning to invest in a sinter plant in Samalaju Industrial Park in Bintulu although no details have been provided on the investment costs and the timetable for the construction of the plant.

The proposed plant will have a capacity of 200,000 tonnes per annum, according to ASXlisted OM Holdings Ltd,which has a 75% stake in OM Sarawak. Cahya Mata Sarawak Bhd owns the remaining 25% equity in the joint venture company.

OM Sarawak owns and operates a smelting plant that has an annual capacity of 170,000 to 200,000 tonnes of ferrosilicon and 250,000 to 300,000 tonnes of manganese alloys. The plant has 16 furnaces.

Transformer cores and electromotors use silicon steel made from ferrosilicon while steelmaking and foundry activities mostly use manganese alloys.

A sinter plant would fit into the company’s activities as the plant would get together iron ore dust with other fine materials at high temperatures to create sinter for use in blast furnaces.

OM Holdings said the sinter plant would have synergies with the company’s manganese-ore concentrate project.

The sinter plant project will provide cost savings and greater procurement options, said OMH in a March 5 investor presentation posted on the company’s website.

Another subsidiary, OM (Qinzhou) Co Ltd’s smelting facilities in Guangxi, China has production capacity of 300,000 tonnes per annum of sinter ore and 80,000 tonnes per annum of high carbon ferromanganese.

Besides the plan to set up the sinter plant, OM’s Sarawak unit have plans to recover waste heat and gases from furnaces for power generation.

The company said based on a preliminary internal study, the residual heat recovered has the potential to power additional furnaces.

“The strategy and long-term plan (for OM Sarawak) is to develop silicon metal production,” said OM Holdings.

According to OMHoldings executive chairman Low Ngee Tong, of OM Sarawak’s 16 furnaces, 15 were in smooth operation at end2017,and that the last furnace would be brought into operation soon.

Nine furnaces produced ferrosilicon and six others, manganese alloys.

“It is important to highlight that the (OM) Sarawak project went from commencement of construction in the middle of 2013 to an efficient steady state production of almost half a million tonnes of alloys per annum within four-and-a-half years.

“During this period,we have also success- fully modified six of our furnaces for the production of manganese alloys.

“With the successful execution of the Sarawak project,the group’s income stream has diversified with the addition of silicon alloys and manganese alloys, and we will have the option of adding metallic silicon to this mix in the future,” he said in a press statement when releasing OM Holdings’ results for financial year ended Dec 31, 2017 (FY17) recently.

The company was initially dependent on a single commodity – manganese ore – from its Australian mine.

In FY17, OM Sarawak produced 174,540 tonnes of ferrosilicon and 173,911 tonnes of manganese alloys,which were significantly higher than 126,261 tonnes of FeSi and 876 tonnes of manganese alloys in FY16.

OM Sarawak contributed A$491.5mil to OMH group revenue in FY17.