ASIATODAY.ID, JAKARTA – French mining company Eramet has taken the decision to cancel its nickel downstream investment worth US$2.6 billion in Weda Bay, Indonesia. Why?
In his written statement quoted Thursday, June 27 2024, Eramet stated that the first reason underlying the decision was the execution strategy related to the joint project with BASF.
In this context, Eramet stated that it had not succeeded in obtaining a satisfactory execution scheme, including the terms and conditions of the contract.
Second, capital allocation. Eramet stated that he wanted to participate in the battery value chain in Indonesia, but was also selective with capital allocation. At the same time, Eramet is also exploring other opportunities for the electric vehicle (EV) value chain such as nickel, lithium and cobalt.
Third, related to the market. Eramet assesses that the global nickel market has changed over the last few years. Eramet is very selective in adding potential new excess capacity from battery grade nickel.
“After conducting a thorough evaluation, Eramet and BASF decided not to continue the joint investment project in the nickel-cobalt refining complex in Weda Bay, Indonesia,” explained Eramet.
Eramet Group Chief Development Officer Geoff Streeton said Eramet remains focused on sustainably optimizing the resource potential of the Weda Bay mine to supply ore to local nickel producers, and will continue to assess investment opportunities in the EV battery value chain in Indonesia which includes nickel, lithium and cobalt .
“Indonesia is ready to play an important role in the future of the global nickel market as a whole,” said Geoff.
As a reference, BASF as Eramet’s partner in Sonic Bay also stated that it was withdrawing. In its official statement, BASF – the world’s largest chemical company from Germany – said the global availability of battery-quality nickel has increased since this project began. Thus, the company no longer sees the need for such a large investment.
Sonic Bay itself is a high pressure acid leach (HPAL) based nickel/cobalt refining plant or smelter which was initially designed to process some of the ore from the Weda Bay Nickel mine. The target is to produce a product between nickel and cobalt, namely around 60,000 tons of nickel and 6,000 tons of cobalt contained in mixed hydroxide deposits known as mixed hydroxide precipitates (MHP), as raw material for electric vehicle (EV) batteries. The nickel-cobalt smelter for EV battery raw materials was initially targeted for production in 2026.
Additionally, nickel and cobalt salts will be used to produce cathode active material (PCAM) precursors and cathode active materials (CAM) for lithium-ion batteries used in electric vehicles.
“The use of low-grade ore will enable the exploitation of new parts of the mine site’s geological profile, thereby optimizing natural resource potential,” Eramet wrote on the official website, quoted Thursday, June 27 2024.
The steps taken by these two companies are certainly unfortunate because the Indonesian government has made them proud.
Moreover, the two european companies have targeted to make a final investment decision (FID) on the Sonic Bay project in the first semester of 2024. (ATN)
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