BASF, Eramet to Conclude USD 2.6B partnership on Indonesia nickel smelter

According to the CEO of BASF, a partnership agreement worth $2.6 billion between the German mining company BASF and the French company Eramet is being finalised to invest in an Indonesian nickel smelting facility.

According to the investment ministry and BASF CEO Martin Brudermüller, the project investment deal would cost about 2.4 billion euros ($2.59 billion). Materials for electric vehicle batteries will be produced as part of the project.

The ministry quoted Brudermüller as saying, "We would like to convey that our agreement with Eramet is at the final stage, and it is likely that our decision will be taken in the first half of 2023." 

In a recent investor presentation, Eramet revealed that, subject to a final investment decision, the partnership would construct a hydro-metallurgical complex with a high-pressure acid leach (HPAL) unit to produce mixed hydroxide precipitate (MHP), with production beginning in early 2026.

A total of 67,000 tonnes of nickel and 7,500 tonnes of cobalt, both of which are used in MHP, are expected to be produced annually at the facility. These metals are used to make the batteries for electric vehicles.

The facility in Weda Bay, Indonesia, would be "in line with Eramet's ambitions to position itself as a key European player in the EV battery value chain," according to the presentation.

According to the presentation, Eramet would hold 51% of the project while BASF would hold the remaining 49%.