China's Lygend starts milestone nickel project in Indonesia (updated)

Hanwa

19/05/2021 11:46

* Lygend starts first HPAL production in Indonesia
    * Company to send products to China soon
    * Project start-up likely to pressure nickel price

 (Adds quotes, detail)
    By Tom Daly, Min Zhang and Mai Nguyen
    BEIJING/HANOI, May 19 (Reuters) - China's Lygend Mining said
on Wednesday its nickel and cobalt smelting project in Indonesia
had made its first batch of mixed hydroxide precipitate (MHP),
becoming the first high-pressure acid leach (HPAL) project in
the country to reach production.
    The $1.05-billion project on Obi island in the province of
North Maluku is among several cobalt-nickel HPAL plants in
nickel miner Indonesia that are under the spotlight as a source
of supply for the burgeoning electric-vehicle battery sector.
    "Our first batch of nickel and cobalt hydroxide products
will be shipped to China soon, and gradually enter the global
market," said Lygend's president Jiang Xinfang.
    Jiang said that Lygend Resources and its Indonesian partner
Harita Group plan to build other projects on Obi island to make
nickel sulphate, precursors and stainless steel-related
products.
    "It means that there is a viable path to produce battery
grade nickel with a reasonably low capital cost and a relatively
short project timeline," said independent consultant Steven
Brown.
    "With the nickel market already in surplus, we can expect
the nickel price to drop if the commissioning process continues
at this pace," Brown added.
    Lygend has been able to tap Chinese contractor Enfi
Engineering Corp, which has experience in HPAL in Papua New
Guinea, to design its project and benefit from relatively
low-cost labour and nickel ore costs in Indonesia.
    Lygend aims to reach first-phase annual capacity of
30,000-37,000 tonnes of MHP in the second half of 2021.
 urn:newsml:reuters.com:*:nL4N2HQ2IN
    A flurry of HPAL projects, all involving Chinese companies,
were announced a few years ago in Indonesia and raised eyebrows
with their low cost estimates and short time frames.
    The pandemic slowed their progress, with Lygend's project
delayed for nine months and only starting trial production last
month.
    Another HPAL project by GEM Co  002340.SZ  at the weekend
shipped its core equipment to the island of Sulawesi from China
and is aiming to start operating in early 2022.
    That project, whose shareholders also include Tsingshan
Holding Group and Japan's Hanwa  8078.T , had originally
targeted first production in 2019.
    Three-month nickel price on the London Metal Exchange
 CMNI3  fell 1.1% to $17,780 a tonne at 0904 GMT. Research house
Antaike forecast an average nickel price in 2021 at $16,500 a
tonne.
    

 (Reporting by Mai Nguyen in Hanoi, Min Zhang in Beijing and Tom
Daly, editing by Louise Heavens and Jane Merriman)
 ((mai.nguyen@thomsonreuters.com; +842438259623; Reuters
Messaging: mai.nguyen.thomsonreuters.com@reuters.net))