Zhejiang Huayou Cobalt is exploring options to secure approximately USD 2.7bn (19.33bn yuan) in financing for a nickel processing facility in Indonesia, backed by Ford Motor, Bloomberg reported, citing people familiar with the matter.
The Pomalaa Block high-pressure acid leaching (HPAL) project is a collaborative effort between Zhejiang Huayou Cobalt, Ford Motor and Vale Indonesia, with the three companies making equity investments in the project.
The project would process ore provided by PT Vale Indonesia’s Pomalaa Block mine to produce battery-grade nickel essential for electric vehicles (EVs).
HSBC and Standard Chartered are leading the loan arrangements and are inviting other banks to contribute to the financing of the battery-nickel facility in south-east Sulawesi, people familiar with the matter said.
Indonesia produces more than half of global nickel output and is said to have been attracting foreign investment to enhance its domestic processing capabilities.
However, the fundraising efforts coincide with a period of subdued nickel prices, which are hovering near a four-year low, driven by reduced demand from the stainless steel sector and slower-than-anticipated growth in the EV sector.
The Pomalaa plant is set to utilise HPAL technology to produce mixed hydroxide precipitate from low-grade nickel ores.
With an expected annual output of 120,000 tonnes of nickel, the facility is poised to become one of the largest HPAL projects in Indonesia.
Huayou disclosed in a December filing that the total investment for the project is estimated at around $3.8bn.
Ownership of the project is divided among the partners, with Huayou holding a 73.2% stake, Vale Indonesia at 18.3% and Ford initially owning 8.5%, with an option to increase its share to 17% within a specified period.
While the construction of the Pomalaa plant was projected to take roughly three years, Huayou has not yet provided an updated timeline.
The company has, however, indicated that preliminary work on the project commenced earlier this year.
