US carmaker Ford has joined PT Vale Indonesia and China’s Zhejiang Huayou Cobalt as their new partner in a USD$ 4.5 billion nickel processing plant in Indonesia, the company said on Thursday (30/3).
It creates a three-party collaboration of equity investments in the Pomalaa Block High-Pressure Acid Leaching (HPAL) Project, in Southeast Sulawesi, where Vale operates a nickel mine.
This HPAL Project’s early site preparations have already started, and full construction is expected to start in November this year, with commercial operations beginning in 2026.
The investment is Ford’s first in the Southeast Asian country and emphasizes the increase among automakers for raw materials used in producing Electric Vehicle (EV) batteries, which account for about 40 percent of a vehicle’s cost, aims to decrease expenses and close the gap on EV market leader, Tesla.
The deal is bringing the US automaker into the upstream nickel business, said the Chief Executive of Vale Indonesia, Febriany Eddy.
Febriany added that Vale has a 30 percent stake in the project, with the remainder being controlled by Ford and Huayou.
The companies did not say how much Ford will invest in the plant, which is expected to produce 120,000 tonnes per year of mixed hydroxide precipitate, a material extracted from nickel ore for use in EV batteries.
The three-way nickel processing project – together with a separate supply agreement under development with Ford and Huayou for a precursor cathode active material critical to manufacturing lithium-ion batteries – collectively will combine with Ford’s other sourced nickel, significantly contributing to support its EV production targets by the end of 2026, as quoted from The Lane Report, Thursday (30/3).
As Indonesia has been trying to develop downstream industries for the metal, this collaboration is in line with its vision to build a domestic EV ecosystem and will deliver materials essential for the auto industry’s shift to EVs, as well as enhance Indonesia’s EV manufacturing industry.
“Ford can help ensure that the nickel that we use in EV batteries is mined, produced within the same ESG standards as part of our business around the world”, the Ford’s chief government affairs officer, Christopher Smith said, at the signing ceremony.
For Ford, this will support its plan to deliver a 2 million EV production run rate by the end of 2026 and further scale over time.
Volkswagen, Europe’s biggest automaker, this month also announced it would invest 180 billion euros (US$196 billion) over five years in areas including battery production and the sourcing of raw materials.
