LX International Corp., the trading unit of South Korea’s LX Group, announced on Tuesday its plan to acquire a 60% stake in Indonesian miner PT Adhi Kartiko Pratama (AKP) at KRW 132.9 billion (USD 101.3 million) to produce nickel, a core material for electric batteries.
The mines of PT AKP on Sulawesi Island, Indonesia, have proven mineable nickel estimated at about 36 million tons, which can be used for 7 million electric vehicles, as stated in a press release by LX International on Nov. 7.
“PT AKP’s mines have great infrastructure such as a haul road, a pit, and a port. The location is also great – the mines are near the nickel industrial complex on the island,” explained an LX International official.
The trading company aims to complete the transaction by Feb. 29, 2024, and intends to increase the Indonesian firm’s annual nickel production capacity from its current 1.5 million tons to 3.7 million tons by 2028.
LX International plans to continue securing nickel and shift its major natural resource business from coal to EV battery minerals, according to an official from the trading firm.
In the third quarter, LX International’s operating profit reached KRW 63.6 billion on a consolidated basis, a 76.7% drop from a year earlier, as reported in its preliminary report on Tuesday.
Its third-quarter revenue fell 22.3% year-on-year to KRW 3.66 trillion, while the quarterly net profit plunged 80.2% from a year earlier to KRW 49 billion.
“The natural resource market boomed, and logistics freight fares significantly rose last year. As they are on a downtrend this year amid the global economic slowdown, the base effect will occur in the third-quarter earnings,” explained an LX International official.
The company anticipates that fourth-quarter results will show improvement, with increased energy use in the winter season and recovery of air freight demand.
LX International is investing the profits from its traditional businesses, such as coal and palm oil supplies, in future growth drivers such as EV battery materials, the company added.
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