China's Dafeng Port Group will invest up to $600 million to build a ferronickel smelter in Kendari, capital of Southeast Sulawesi province, an executive said here Thursday.

The smelting plant, occupying an area of around 600 hectares, will produce 200,000 tons of ferronickel alloy a year, said group president Ni Xiangrong.

Construction of the plant is expected to be completed at the end of next year.

Besides the ferronickel smelter, Dafeng Port Croup also plans to build a coal-powered electricity plant with a capacity of 360 megawatt.

Nin Naixuan, president of PT Nobel Mining, Dafeng Port Croup's local partner, said the building of a smelter will surely increase the employment opportunities, promote local economic growth and boost trade between Indonesia and China.

Dafeng Port Group's Ni expressed the belief that building a smelting plant in Indonesia would benefit China, saying, "Ferronickel produced from this project will be an alternative supply for stainless steel producers in China."

Nickel, a bright metal that has low conductivity and is resistant to corrosion, is mainly used in the production of stainless steel, magnets, rechargeable batteries, coinage and electric guitar strings.