China’s Zhejiang Huayou Cobalt Co said on Monday it would partner with companies including a unit of battery maker EVE Energy to set up a $2.08 billion nickel and cobalt smelting project in Indonesia.
Huayou will hold 20% of the venture and it is the cobalt supplier’s third major investment in a smelter in top nickel ore miner Indonesia, which is becoming an important centre for the nickel and cobalt chemicals used in electric vehicle batteries.
The latest site will be at Weda Bay on the island of Halmahera in North Maluku province where Huayou already partners with Tsingshan Holding Group in a nickel sulphate project. The project aims to produce around 120,000 tonnes of nickel and 15,000 tonnes of cobalt on a metal content basis, Huayou said in a filing to the Shanghai Stock Exchange.
EVE will have a 17% stake, while the other partners are Yongrui Holdings with 31%, Glaucous International Pte Ltd with 30% and Lindo Investment Pte Ltd at 2%.
Yongrui is wholly-owned by Yongqing Technology Co, a subsidiary of Tsinghan, the biggest nickel producer in Indonesia and the world’s top stainless steel maker.
Several other Chinese-backed nickel plants are under construction in Indonesia, including Huayou’s Huayue project on the island of Sulawesi
“While Huayou is only holding a 20% stake in the project, we would like to highlight that this project is massive in size,” Daiwa Capital Markets said in a note.
Several other Chinese-backed nickel plants are under construction in Indonesia, including Huayou’s Huayue project on the island of Sulawesi with partners Tsingshan and China Molybdenum Co, which aims to produce 60,000 tonnes per year.
The first of the new plants, a venture between China’s Lygend Mining and Indonesia’s Harita Group, began production last week..
Huayou’s filing did not say when its latest Weda Bay project would begin operating.
(By Tom Daly, Min Zhang and Mai Nguyen; Editing by Christian Schmollinger)
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