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Eramet Eyes Collaboration with Huayou after BASF's Exit
WINDONESIA July 10, 2024
A smelter in operation. (Kontan/dss+).
French mining company Eramet is reportedly exploring a partnership with Chinese cobalt supplier Zhejiang Huayou Cobalt to undertake nickel-based battery production in Indonesia.
Previously, the US$2.6 billion nickel-cobalt smelter refinery project to produce electric vehicle (EV) battery materials in the Weda Bay area of Central Halmahera Regency, North Maluku Province, was planned to be developed by Eramet in collaboration with German company BASF.
However, BASF decided to discontinue the collaboration due to significant changes in the nickel market, and Eramet cited another reason for the discontinuation is due to increased availability of battery-grade nickel.
The project would have been the only HPAL facility in Indonesia with shareholders from Western countries, making it potentially eligible for substantial subsidies under the United States Inflation Reduction Act.
In addition to exploring a partnership, Eramet is also considering taking a stake in the Huafei plant controlled by Huayou. The plant is the world's largest High Pressure Acid Leach (HPAL) facility for processing and refining limonite nickel.
The potential cooperation highlights the challenges Western companies face in creating supply chains for critical minerals without Chinese participation.
Chinese companies are able to build such plants much faster and cheaper than Western companies, although they also face concerns about their management of tailings, which pose severe contamination risks.
With that capability, it is predicted that more Chinese-made HPAL plants processing nickel ore for batteries will be operating in Indonesia in the coming years to meet the EV industry's growing demand.
Huayou already operates two units in Indonesia and plans to build two more through partnerships with Brazil's Vale.
Nickel Industries, listed on the Australian Stock Exchange, and Indonesian conglomerate Harum Energy are also constructing plants together with China's private company Tsingshan Holding Group, the world's largest producer of nickel and stainless steel.
Source: industri.kontan.co.id