China's GEM seeks to double stake in Indonesia nickel project as Tsingshan cuts back (updated)

Hanwa

04/01/2021 08:21

* Key Indonesia nickel smelting project delayed to 2022 -
official
    * London nickel prices rise as much as 5% to 2-week high on
Monday
    * GEM to double stake to 72% as Tsingshan, CATL reduce
holdings

 (Recasts; adds GEM share, nickel price jumps and IMIP comment)
    BEIJING, Jan 4 (Reuters) - China's GEM Co Ltd  002340.SZ 
aims to double its stake in an Indonesian nickel development now
delayed until 2022, taking majority control and buying most of
stainless steel maker Tsingshan Holding Group's shares in the
closely watched project.
    GEM, a supplier of battery materials used in electric
vehicles, said on Monday it has signed a framework memorandum of
understanding for its Jingmen unit to double its holding to 72%
from 36%, including taking over a 21% stake previously held by
Tsingshan, according to a filing to the Shenzhen Stock Exchange.
    Once implemented, the move will cement GEM's control of the
project, which is being developed amid a global shortage of
nickel, a key ingredient in batteries uses to power electric
vehicles.
    Under the agreed deal, Guangdong Brunp, the recycling arm of
battery maker Contemporary Amperex Technology Co Ltd (CATL)
 300750.SZ , will go down to a 10% stake from 25% previously.
That leaves Indonesia Morowali Industrial Park - a joint venture
between Tsingshan and Indonesia PT Bintangdelapan Group - on 10%
and Japan's Hanwa  8078.T  on 8%.
    Financial terms of the MoU weren't disclosed and it wasn't
clear when the MoU might be implemented. 
    The 50,000 tonnes per year plant on the island of Sulawesi,
designed to produce chemicals used in batteries for electric
vehicles, is one of a number of nickel projects in Indonesia
that have caught industry attention due to their low budget
projections and short delivery times.
    The GEM project, which will also produce cobalt chemicals,
was originally estimated to cost $700 million and start
production in 2019, but its launch was pushed back to end-2020
and has been delayed again by the coronavirus pandemic.
 urn:newsml:reuters.com:*:nL4N2JF05F 
    An official at GEM's investor relations office said on
Monday part of the capacity will start production in 2022. 
    Nickel prices on the London Metal Exchange  CMNI3  rose as
much as 5% on Monday to a two-week high of $17,450 a tonne
following the announcement.
    Shares in GEM, which last month extended a contract to buy
cobalt hydroxide from Glencore Plc  GLEN.L  to 2029, rose 10% to
7.69 yuan ($1.19), their highest since March 2018.  urn:newsml:reuters.com:*:nFWN2IJ0RW
    CATL, Hanwa did not answer phone calls seeking comment,
while Tsingshan and an IMIP spokesman declined to comment.
 
($1 = 6.4650 Chinese yuan renminbi)

 (Reporting by Min Zhang and Shivani Singh; additional reporting
by Mai Nguyen, Tom Daly and Fransiska Nangoy; Editing by Kenneth
Maxwell)
 ((min.zhang@thomsonreuters.com; (8610) 5669-2105;))