Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif says the government will seek for new partners and investors after Germany’s BASF and French’s Eramet decided to withdraw from the Sonic Bay project in Weda Bay Industrial Estate, North Maluku.

” If they withdraw, we will look for others, there are many others who want to work on the project,” Arifin said on Friday, June 28, 2024.

Speaking about the reason for BASF’s withdrawal from the project, Arifin said the German company wanted to use the end products from its own industry.

“BASF said that they can secure their own supply need and decided not to invest in Indonesia. Perhaps, they have invested in other place, we do not know the real reason behind,” he added.

Germany’s BASF and French’s Eramet, which already have business legality under the name PT Eramet Halmahera Nikel (PT EHN) planned to develop the US$2.6 billion Sonic Bay project in Weda Bay Industrial Estate, North Maluku. The project is the construction of a nickel refining plant with High Pressure Acid Leach (HPAL) technology that produces Mixed Hydroxide Precipitates (MHP).

According to the Investment Ministry/Investment Coordinating Board, BASF and Eramet’s decision not to proceed with the investment plan was based on consideration of significant changes in nickel market conditions, especially in the choice of nickel which supplies raw materials for electric vehicle batteries. Thus, BASF decided that there is no longer a need to invest in the supply of electric vehicle battery materials.

In a statement to Indonesia Business Post, French mining and smelter company Eramet announced that the company and Germany’s BASF have decided against a joint investment in a nickel-cobalt refining complex in Weda Bay.

Eramet will continue to evaluate potential investments in the nickel electric vehicle battery value chain in Indonesia and will keep the market informed in due course.

In 2020, Eramet and BASF signed an agreement to assess the potential of jointly developing and constructing a nickel-cobalt refining complex in Weda Bay. After thorough evaluation, including discussions about project execution strategy, both partners have decided against this investment.

Geoff Streeton, Eramet’s Group Chief Development Officer, said Indonesia is poised to play a pivotal role in the future of the overall global nickel market. “Eramet remains focused on sustainably optimizing the resource potential of Weda Bay mine to supply ore to local nickel producers, while also further investigating opportunities to participate in the nickel electric vehicle battery value chain in Indonesia,” he said.

Cooperation with Geological Agency

Despite its withdrawal from Sonic Bay Project, Arifin said Eramet will continue its cooperation with Geological Agency, a government agency under the Ministry of Energy and Mineral Resources.

On May 6, 2024, The Indonesian Geological Agency sealed a collaboration agreement with Eramet Group, a French metallurgical mining company, to conduct a study on critical minerals.

Irwandy Arif, Expert Staff to the ESDM Minister for Accelerating Mineral Governance, said that the partnership aims to strengthen the electric vehicle (EV) ecosystem in Indonesia, emphasizing that the ESDM ministry welcomes the opportunity to collaborate with Eramet in Indonesia.

The MoU signing ceremony took place in the presence of Bruno Faour, Director of Eramet Indonesia, and Agung Pribadi, Head of the Center for Mineral Resources of Coal and Geothermal (PSDMBP) at the Geological Agency. The event was also attended by Pauline Leduc, Deputy Head of the Economic Department at the French Embassy in Indonesia.