European chemicals firm BASF, France-based mining group Eramet and German auto producer Volkswagen, through its battery firm PowerCo, said they will invest in developing Indonesia's car battery ecosystem after meeting Indonesian President Joko Widodo on 16 April.
BASF plans to invest approximately $2.6bn to develop a car battery ecosystem in North Maluku province, according to a post-meeting statement by the country's investment minister Bahlil Lahadalia. BASF will also work with Eramet to tackle the environmental, social and governance (ESG) aspect of the project that will begin construction at the end of 2023, Bahlil added.
BASF and Eramet previously told Argus in January that they are working towards a joint-venture deal to invest in a battery-grade nickel and cobalt hydrometallurgical refining complex in Indonesia. The project will be located near Eramet's Weda Bay mine in North Maluku and will include a high-pressure acid leach unit with a target production of 67,000 t/yr of nickel metal and 7,000 t/yr of cobalt metal contained in mixed hydroxide precipitate (MHP). It could come into production in early 2026, an Eramet spokesperson said.
PowerCo will develop a car battery ecosystem in Indonesia as it works with other firms, including Indonesian companies.
Nickel-related recent developments in Indonesia, including the development of an Indonesian nickel price indexes, have cemented its prospect of being a future global nickel powerhouse. But ESG concerns have been raised, given that much of the world's battery-grade nickel coming from Indonesia will be in the form of nickel mattes and MHP, which involves a heavily polluting process in terms of environmental degradation and carbon emissions.
The 7.2pc global mined nickel output growth in 2023 will be largely dominated by Indonesia, which will account for 80pc of the increase, according to the Australian Office of the Chief Economist's latest Resources and Energy Quarterly.
Indonesia's materialised foreign direct investment surged to record highs of $45.6bn in 2022, as the country continues with its pledge to utilise its natural resources for further downstream processing to ultimately develop an integrated electric vehicle ecosystem. North Maluku, with its Weda Bay Industrial Park, has had a rapidly developing concentration of nickel processing plants in recent years and received $4.5bn of foreign direct investment in 2022.
