Merdeka Battery gets $1.4 billion loan for new nickel plant

Nickel producer PT Merdeka Battery Materials has obtained a $1.4 billion loan to fund the construction of a plant located on Sulawesi island, according to a company statement.

Bangkok Bank PCL, PT Bank Permata, PT Bank Mandiri, PT Bank Negara Indonesia and PT Bank Rakyat Indonesia provided the seven-year senior secured and non-recourse loan, according to the statement.

PT Sulawesi Nickel Cobalt is the borrower of the facility, the proceeds of which will finance the construction of a high-pressure acid leach plant located within the Indonesia Morowali Industrial Park, the statement showed. Such processing plants will produce nickel or cobalt chemicals used for EV batteries.

The construction of the plant comes at a time when the nickel industry is grappling with weak prices and tight supply of ores in Indonesia. The Southeast Asian country now accounts for more than half of world’s nickel output and has been aggressively wooing investment for its domestic processing industry.

A subsidiary of China’s Zhejiang Huayou Cobalt Co. will manage the construction of the new HPAL plant, according to the statement. The project has a total investment of approximately $1.8 billion, with a construction time of 18 months starting January. It will have an annual capacity of 90,000 tons a year.

Merdeka Battery indirectly owns stakes in Sulawesi Nickel Cobalt via its subsidiary PT Merdeka Energi Baru, which controls 50.1% in the nickel firm, according to the statement.

(By Harry Suhartono)

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