Trial production of Indonesian Nickel Joint Venture of Huayou Cobalt Co., Ltd.

Huayou Cobalt said on Wednesday that it had made its first trial production at a smelting joint venture in Indonesia that produces cobalt and nickel used in the manufacture of (EV) electric cars.

PT Huayue, a joint venture with Castle Peak Holdings and Luoyang Molybdenum, is the second of many closely watched projects in Indonesia to reach trial operation.

Huayou said in a document that the inspection confirmed that the quality of the product met the requirements and that the product was a mixed hydroxide precipitate (MHP), that could be processed into nickel and cobalt chemicals used in electric vehicle batteries. The company did not give a time frame for full production, and some new projects have been slowed by the pandemic.

On the basis of metal content, PT Huayue on Sulawesi Island aims to produce 60000 tons of nickel and 7800 tons of cobalt per year using high-pressure acid leaching (HPAL) technology, which enables rapid production and high yield recovery.

Indonesia, the top nickel miner, banned exports of nickel ore from 2020 as it sought to process more resources at home to maximize returns. The ban persuaded more companies from China's top electric car market to set up factories in Indonesia.

In May, Huayou bought a 20 per cent stake in a larger Indonesian HPAL project, but did not say when the plant would start, while another Indonesian HPAL project led by GEM Co aims to start in 2022.

Later on Tuesday, Huayou agreed to jointly mine nickel, cobalt, manganese and lithium with Beijing Dangsheng Materials Technology Co., Ltd., and will supply 300000 to 350000 tons of battery precursors to the company between 2022 and 2025.

Dangsheng material, which produces battery cathode materials, has signed cooperation agreements with Zhongwei New Materials Co., Ltd., respectively, to purchase another 200000-300000 tons of precursors between 2022 and 2024.

Dangsheng and Zhongwei New Materials also plan to jointly mine nickel in Indonesia, where Dangsheng will invest in the 60000 tons of nickel matte project of Zhongwei New Materials each year. The two sides will also build a lithium iron phosphate base with an annual production capacity of 300000 tons in Guizhou Province, China.