China battery firms set up $700 mln nickel joint venture in Indonesia

Hanwa

28/09/2018 08:05

* Units of GEM, CATL to produce battery chemicals in
Sulawesi
    * Project will have initial nickel smelting capacity of 50
ktpa
    * China's Tsingshan, Japan's Hanwa are other investors

    By Tom Daly
    BEIJING, Sept 28 (Reuters) - Chinese battery firm GEM Co Ltd
 002340.SZ  on Friday said it was teaming up with four companies
to invest a total of $700 million in a project to produce
battery-grade nickel chemicals in Indonesia.
    The investment comes as several global metals producers have
also set their sights on Indonesia's nickel reserves, looking to
tap an expected surge in demand for the battery metal from the
electric vehicle sector.  urn:newsml:reuters.com:*:nL3N1W044D 
    The companies joining GEM include units of top Chinese
lithium battery maker Contemporary Amperex Technology Ltd
 300750.SZ  (CATL) and stainless steel-maker Tsingshan Holding
Group. 
    They aim to establish nickel smelting capacity of at least
50,000 tonnes per year at Tsingshan's industrial park in
Morowali on the Indonesian island of Sulawesi.
    The project will also have 4,000 tonnes of cobalt smelting
capacity, as well as churning out a range of battery chemicals,
including 50,000 tonnes per year of nickel hydroxide
intermediates.
    "In the future, the product structure will be adjusted
according to the global market demand and the production scale
will be expanded," GEM said in an emailed statement, without
providing a launch date.
    Japanese trading house Hanwa  8078.T  and Indonesia PT
Bintangdelapan Group are the other firms involved in the
project.
    The partners will rely on Tsingshan, the biggest nickel
producer in Indonesia, to provide the ore that will be processed
to make the chemicals. Nickel is also used to make stainless
steel.
    A Hong Kong unit of Tsingshan will hold 21 percent of the
project, with GEM subsidiary Jingmen GEM owning 36 percent.
Brunp, the recycling arm of CATL, will hold 25 percent, with
Hanwa on 8 percent and Indonesia Morowali Industrial Park (IMIP)
on 10 percent. IMIP is a joint venture between Indonesia PT
Bintangdelapan Group and Tsingshan.   
    Shenzhen-based GEM is best known as a battery recycler but
in March announced a deal to buy around one-third of Glencore's
cobalt production over the next three years. It has previously
been linked with a move for a stake in Vale's  VALE3.SA  Goro
nickel-cobalt mine in New Caledonia.  urn:newsml:reuters.com:*:nL1N1QW2DL  urn:newsml:reuters.com:*:nL1N1NN1X1  
          
    Separately on Friday, GEM and Tsingshan held a
groundbreaking ceremony for a joint-venture plant in Ningde, in
southeastern China's Fujian province, which will produce 70,000
tonnes per year of battery materials. 
    The plant involves initial investment of 1.85 billion yuan
($268.72 million), according to the GEM statement.
        
($1 = 6.8844 Chinese yuan renminbi)

 (Reporting by Tom Daly; additional reporting by Fergus Jensen
in JAKARTA
Editing by Joseph Radford)
 ((tom.daly@thomsonreuters.com; +86 10 6627 1023;))