Vale Indonesia, Huayou sign deal to build Pomalaa nickel plant

Nickel miner PT Vale Indonesia said on Thursday it has signed a framework agreement with China’s Zhejiang Huayou Cobalt to build a plant on Sulawesi island producing nickel minerals used in electric vehicle batteries.

The two companies agreed to develop a facility known for a process called high-pressure acid leaching (HPAL) which would have a potential mixed hydroxide precipitate production capacity of 120,000 tonnes of nickel content per year, Vale said in a statement.

Under the agreement, Huayou will develop the Pomalaa project in Southeast Sulawesi and Vale will have rights to acquire up to 30% stake in the project, Vale said, adding that it would supply nickel ore for the project.

Vale had previously been working with Japanese miner and smelter Sumitomo Metal Mining Co (SMM) on a feasibility study for the Pomalaa project since 2012.

SMM said on Monday it has decided to discontinue the study because of a disagreement with Vale Indonesia.

“Huayou has proven its track record in HPAL construction and operations in Indonesia,” Vale chief executive Febriany Eddy said in the statement.

Huayou started trial production for its joint venture HPAL plant in other parts of Sulawesi late last year.

(By Fransiska Nangoy; Editing by Martin Petty and Kanupriya Kapoor)