Chinese battery firms team up for $700m nickel joint venture in Indonesia

A worker watches as trucks load up raw nickel near Sorowako, Indonesia's Sulawesi island, January 8, 2014. REUTERS/Yusuf Ahmad/File Photo

Chinese battery firm GEM Co Ltd on Friday said it was teaming up with four companies to invest a total of $700 million in a project to produce battery-grade nickel chemicals in Indonesia.

The investment comes as several global metals producers have also set their sights on Indonesia’s nickel reserves, looking to tap an expected surge in demand for the battery metal from the electric vehicle sector.

The companies joining GEM include units of top Chinese lithium battery maker Contemporary Amperex Technology Ltd (CATL) and stainless steel-maker Tsingshan Holding Group.

They aim to establish nickel smelting capacity of at least 50,000 tonnes per year at Tsingshan’s industrial park in Morowali on the Indonesian island of Sulawesi.

The project will also have 4,000 tonnes of cobalt smelting capacity, as well as churning out a range of battery chemicals, including 50,000 tonnes per year of nickel hydroxide intermediates.

“In the future, the product structure will be adjusted according to the global market demand and the production scale will be expanded,” GEM said in an emailed statement, without providing a launch date.

Japanese trading house Hanwa and Indonesia PT Bintangdelapan Group are the other firms involved in the project.

The partners will rely on Tsingshan, the biggest nickel producer in Indonesia, to provide the ore that will be processed to make the chemicals. Nickel is also used to make stainless steel.

A Hong Kong unit of Tsingshan will hold 21 percent of the project, with GEM subsidiary Jingmen GEM owning 36 percent. Brunp, the recycling arm of CATL, will hold 25 percent, with Hanwa on 8 percent and Indonesia Morowali Industrial Park (IMIP) on 10 percent. IMIP is a joint venture between Indonesia PT Bintangdelapan Group and Tsingshan.

Shenzhen-based GEM is best known as a battery recycler but in March announced a deal to buy around one-third of Glencore’s cobalt production over the next three years. It has previously been linked with a move for a stake in Vale’s Goro nickel-cobalt mine in New Caledonia.

Separately on Friday, GEM and Tsingshan held a groundbreaking ceremony for a joint-venture plant in Ningde, in southeastern China’s Fujian province, which will produce 70,000 tonnes per year of battery materials.

The plant involves initial investment of 1.85 billion yuan ($268.72 million), according to the GEM statement.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.