POSCO Holdings Inc. stated that it is spending US$441 million to build a nickel refining facility in Indonesia as it pushes to beef up its supply chains of the key secondary battery material.
The facility will be located in the Weda Bay industrial park on the northern eastern island of Halmahera, North Maluku. The facility is expected to produce nickel matte, an intermediate product used in making battery-grade nickel, the South Korean steel giant said in a release.
Once it enters commercial operations, the facility will be capable of producing 52,000 tons of nickel intermediates per year that can power one million electric vehicles (EVs). The will begin to be constructed this year and is estimated to begin production in 2025.
The project is part of POSCO’s plans to strengthen the sourcing of EV battery components by expanding investments in nickel mining and refining facilities through potential joint ventures and other forms of partnerships. POSCO aims to produce 200,000 tons of nickel and 300,000 tons of lithium a year by 2030
POSCO’s expansion into Indonesia’s nickel industry
POSCO has picked the nickel and lithium businesses as two of POSCO Group’s seven core businesses to engage the market by building the entire value chain of secondary battery materials, from raw materials to finished products, and strengthening competitiveness through continuous investment.
Indonesia is the country of choice for POSCO due to its abundant nickel reserves. Based on a United States Geological Survey (USGS) report, Indonesia’s nickel production last year reached 1.6 million metric tons, with reserves of around 21 million metric tons.
In addition to Halmahera, POSCO will also build a nickel refining facility in Sulawesi to secure Indonesian nickel supplies following the signing of a memorandum of agreement (MOA) at the end of March with China’s Ningbo Reichin Industry & Trade Co Ltd.
Under the agreement, POSCO and Ningbo Richin plan to build a mixed hydroxide precipitate (MHP) production plant capable of producing 120,000 tons of nickel annually in Sulawesi. As a first step, the construction of a production plant with a capacity of 60,000 tons will begin this year, while the production phase is expected to start in 2025.
To secure nickel sulphate supplies, in Dec 2021, POSCO and PT Bumi Mineral Sulawesi, part of Kalla Group, signed a memorandum of understanding (MOU). Through this collaboration, POSCO will become the off-taker of all nickel sulphate products from the Bumi Mineral Sulawesi’s smelter in Luwu Industrial Park, South Sulawesi.
Apart from that, Bumi Mineral Sulawesi and POSCO also agreed to explore cooperation in building a refining facility and precursor and cathode factories in the Luwu Industrial Park.
