Eramet and BASF Make History with $2.6 Billion Nickel Deal to Power Indonesia's EVs

  • 24-Jan-2023
  • Journalist: Jaideep

Indonesia: German chemical giant BASF and leading French miner Eramet are in the final stages of a $2.6 billion joint venture to build a facility for Nickel processing in Indonesia. The project is part of Indonesia's larger plan to capitalize on its vast reserves of Nickel by inviting foreign companies to construct facilities to manufacture EV batteries and electric cars.

The two companies have acknowledged their plans for a hydro-metallurgical project at Weda Bay, Indonesia, which will involve producing battery-grade Nickel and Cobalt from Eramet's mine there. Although they have not yet confirmed the proposed investment, Indonesian Investment Minister Martin Brudermuller cited an estimated cost of 2.4 billion euros ($2.59 billion).

According to a ministry statement, Brudermuller has confirmed that the agreement with Eramet has reached its final stage and it is likely that a decision will be taken during the first half of 2023.

Eramet noted that their project is subject to a final investment decision and more information will be revealed if the decision is made. BASF spokesman Paul Warkentin added further details would be provided upon conclusion of an assessment.

The plant to be constructed is said to produce mixed hydroxide precipitate (MHP) from Nickel through a high-pressure acid leach (HPAL) plant, which is used in electric vehicle batteries. Once the necessary investment decision has been made, production could begin as early as 2026, with an output capacity of up to 67,000 tonnes of Nickel and 7,000 tonnes of Cobalt contained in MHP per year.

BASF and Eramet's investment plan were in sync with the government's policies “aspirations to set up Indonesia as world-class EV player,” stated Indonesian Investment Minister Bahlil Lahadalia.

Indonesia is approaching closure on deals with Chinese automaker BYD Group and Tesla to establish electric vehicle production facilities, according to a top cabinet official. The country was once the most prolific supplier of Nickel to the international stainless-steel industry; however, its Nickel producers are adjusting their operations to capitalize on the increasing demand for Nickel in batteries.

Analysts believe that Indonesia is set to become the world's largest supplier of Nickel for battery use, utilizing its massive 4.5 million tonne capacity to meet both domestic and international demand, despite being a small portion of the entire 3 million tonne market.

Major investments into MHP operations in Indonesia have been dominated by Chinese businesses such as Zhejiang Huayou Cobalt and Tsingshan Holding Group. In addition, Australia's Nickel Industries announced it will raise $471 million in capital to finance the purchase of a few Nickel projects in Indonesia. The company also plans to collaborate with Shanghai Decent Investment (Group) Co Ltd, part of the Tsingshan Group, to develop battery Nickel.

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