Indonesia battery-grade nickel plant awaits environmental nod- developer

Hanwa

05/04/2019 11:27

By Fransiska Nangoy and Wilda Asmarini
    JAKARTA, April 5 (Reuters) - Indonesia's first plant to
produce battery-grade nickel chemicals is on track to start
operations by 2020, though the project still needs an
environmental permit that could take up to eight months to be
approved, the developer told Reuters.  
    China's Tsingshan Group and partners including GEM Co Ltd
 002340.SZ  are building a $700 million high pressure acid
leaching (HPAL) plant at the PT Indonesia Morowali Industrial
Park (IMIP) on Indonesia's Sulawesi island, a nickel mining hub.
 
    Ground breaking started in January on the plant, which is
due to be completed within 16 to 18 months and will allow
Indonesia to export nickel sulphate, a component for lithium-ion
batteries used in electric vehicles (EVs).      
    Nonetheless, some analysts have cast doubt on the ambitious
timeline for the HPAL facilities, which are more complicated
than other nickel-processing plants that Tsingshan has built.
 urn:newsml:reuters.com:*:nL8N1XR4Z7
    "We are building it fast because that it is how we model our
business to avoid higher costs, and we need also to catch up
with the market," Alexander Barus, coordinating executive
director of IMIP, said in an interview.
    IMIP is also a minor stakeholder in the plant.
    He said construction was currently at the excavation stage
and the company is preparing an environmental impact assessment,
known locally as AMDAL, which typically takes around six to
eight months.
    "This is something that we cannot rush," he said, adding 
construction would proceed as soon as the developer gets a green
light from Indonesia's Environment Ministry. 
    According to initial research, it should be possible to
neutralise waste, known as tailings, and remove toxic materials
so that it can be safely disposed of, Barus said.
    "Whether it will be an above-ground tailings or otherwise,
we have to wait for the result," Barus said. 
    Ary Sudijanto, an official at Indonesia's Environment
Ministry who oversees AMDAL proposals, said the ministry had not
yet received a request from the Morowali plant.
    
    SPRAWLING INDUSTRIAL PARK
    At the plant in the 2,000-hectare (4,900-acre) industrial
park, Tsingshan and its partners aim to produce 131,000 tonnes
of nickel sulphate crystals, 13,000 tonnes of cobalt sulphate
crystals, and 27,000 tonnes of manganese sulphate crystals per
year, he said.
    The industrial park already has nearly 30 jetties operating,
giving it a shipping capacity nearly as big as Jakarta's main
port, Tanjung Priok, he said. 
    The park has 1,245 megawatts (MW) of power installed and an
additional two 350-MW coal power plants are currently being
constructed.
    Tsingshan is already a substantial miner and processor of
nickel ore, converting it to nickel pig iron (NPI) to feed a
stainless steel mill in Morowali. The company is also building a
carbon steel plant.
    Indonesia has rich nickel reserves of around 3.5 billion wet
tonnes, with around 60 percent of them low-grade laterite ore,
Barus said.
    "This is good for Indonesia because up to now we haven't
used the low-grade ore," he said.
    Barus said he expects there to be more HPAL plants to be
built at the estate once the first is "on solid ground".  
    Indonesia's nickel industry in the next decade could surpass
the value of its second-biggest export earner, palm oil, as new
investment boosts capacity, Thomas Lembong, head of the
Indonesia Investment Coordinating Board, told Reuters in March.
 urn:newsml:reuters.com:*:nL3N21E1ZS   
    Exports from the HPAL plant are expected to be worth around
$800 million a year and will mainly go to China, Barus said,
though the government is hoping Indonesia will eventually create
its own downstream industry. 
    "It will be good if we can be produce (batteries) ourselves,
since the only component that is not produced here is lithium,"
he said.
    Indonesia, the second-largest car producer in Southeast Asia
after Thailand, announced plans this year to introduce a fiscal
scheme that will offer tax cuts to EV battery producers and
automakers.
    Indonesia aims for 20 percent of vehicles produced in the
country to be EVs and is anticipating investment from carmakers
from South Korea, Japan, China and Europe.

 (Additional reporting by Bernadette Christina Munthe; Editing
by Ed Davies and Christian Schmollinger)
 ((Fransiska.Nangoy@thomsonreuters.com; +62 21 2992 7610;
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