Huayou Cobalt has also sought to expand by investing in Indonesia to secure more sources of the other raw materials used for producing EV batteries. It signed a framework cooperation agreement with Indonesia-listed nickel company Vale Indonesia for developing a high-pressure acid leaching (HPAL) processing facility in Pomalaa, South Sulawesi, for an undisclosed price. The deal requires Huayou Cobalt to build the Pomalaa HPAL project and then Vale Indonesia will have the right to acquire up to 30% of the shares in it.
The Pomalaa HPAL project will process the limonite ore and low-grade saprolite ore from Vale Indonesia’s mine in Pomalaa and produce mixed hydroxide precipitate with a production capacity of up to 120,000 metric tonnes of nickel per annum, which will be used in EV batteries.
Vale Indonesia’s chief financial officer, Bernardus Irmanto, said that Huayou Cobalt is preparing studies related to, among others, power supply, water supply and tailing process, which will be held within six months. The construction of the HPAL project will begin at the end of this year, and is slated for completion within three years.
“We expect to benefit from the rapid development of the Pomalaa project, as Huayou will carry out the initial investment,” Bernardus said.
This is one of two upcoming Sulawesi smelter projects for Vale Indonesia, with the second smelter project located in Central Sulawesi. Vale Indonesia currently operates an integrated mine and nickel refinery in Sorowako, South Sulawesi. The nickel refinery has been operating for 53 years and produces the lowest carbon emissions per ton of nickel in the country.
The company has vowed to avoid using coal to power its new smelters, with plans to replace the high-emissions fossil fuel with hydro power in Sorowako and liquified natural gas (LNG) in the Bahodopi Block.
While Vale Indonesia has not revealed what energy source it will use to power the new smelter in the Pomalaa Block, they have a maximum 6-month grace period to arrive at a decision. Construction on the smelter has already begun, and it is expected to finish within three years.
Moreover, Vale Indonesia is confident that Huayou’s experience in more efficient mining technologies will help accelerate completion of the mechanical components in one year or less. “We appreciate that our partner is in line with our low carbon agenda, to not use a coal-fired power plant. This FCA is evidence of the alignment of our sustainability commitments, which is extremely important for PT Vale,” Febriany said during the signing ceremony on April 27.
“Huayou has a proven track record in HPAL construction and operations in Indonesia. We are confident that the two parties can serve as a good complement for each other.”
The two parties have agreed that Huayou will build and develop the Pomalaa Block HPAL Project, while Vale Indonesia has the right to acquire a stake of up to 30 percent in the project.
The smelter will be installed with the proven Huayou HPAL processor, technology and system to process low-grade limonite and saprolite ores from Vale Indonesia’s Pomalaa Block mine to produce mixed hydroxide precipitate (MHP). The smelter’s minimum installed capacity is estimated at 120,000 metric tons of nickel per year, with the MHP expected to contribute to Indonesia’s electric vehicle (EV) industry, forecast to grow 23 percent this year.
“This is a significant milestone that reflects our longstanding commitment to developing Indonesia’s world-class nickel resources,” said Vale Indonesia president commissioner Deshnee Naidoo, who attended the FCA signing by video link.
Huayou has been involved in developing several nickel and cobalt smelters in Indonesia, particularly as investments in the country’s EV industry has risen significantly in recent times. Speaking to Reuters, the company is targeting annual production of 120,000 tons of nickel and 15,000 tons of cobalt.