Germany's BASF (BASFn.DE) and French miner Eramet (ERMT.PA) are finalising a $2.6 billion partnership deal to invest in a facility in Indonesia to process nickel for use in batteries for electric vehicles, Indonesian officials said.
The announcement comes as Southeast Asia's biggest economy has been courting global companies to build facilities to produce EV batteries and electric cars to exploit the country's rich nickel resources.
The project investment would be worth around 2.4 billion euros ($2.59 billion), the investment ministry said, citing BASF chief executive Martin Brudermüller.
"We would like to convey that our agreement with Eramet is at the final stage. It is likely that our decision will be taken in the first half of 2023," the ministry quoted Brudermüller as saying.
The project would be developed in Indonesia's Weda Bay to produce mixed hydroxide precipitate (MHP) from nickel through a high-pressure acid leach (HPAL) plant, it said. MHP is used in electric vehicle batteries.
Indonesia is also finalising agreements with Chinese automaker BYD Group and Tesla (TSLA.O) to invest in EV production facilities, a senior cabinet minister said on Tuesday.
Once the biggest supplier of nickel to the global stainless steel industry, nickel producers in Indonesia have been retooling so they can take advantage of the growing demand for nickel in batteries.
While overall battery demand for nickel makes up a small portion of the 3 million tonne market, Indonesia is primed to become the world's biggest supplier as it builds out some 4.5 million tonnes of capacity that can supply both markets over the next five years, analysts estimate.
An investor presentation by Eramet this month showed that the planned new plant is expected to start production in early 2026, subject to a final investment decision, with an output capacity of up to 67,000 tonnes of nickel and around 7,000 tonnes of cobalt per year contained in MHP.
Investment into MHP production in Indonesia has so far been dominated by Chinese companies such as Zhejiang Huayou Cobalt and Tsingshan Holding Group.
