China Molybdenum Co. (CMOC) through its financial arm W-Source planned to take an indirect 30 percent stake in an Indonesian project own by PT Huayue Nickel Cobalt, the company said on Friday (08/11) - Photo by China Moly Office

JAKARTA (TheInsiderStories) – China Molybdenum Co. (CMOC) through its financial arm W-Source planned to take an indirect 30 percent stake in an Indonesian project own by PT Huayue Nickel Cobalt, the company said on Friday (08/11). The seller is investment firm, Newstride Limited, and PT Indonesia Morowali Industrial Park (IMIP).

“The company will indirectly hold 30 percent equity interests in Huayue through W-Source, and Huayue will become a joint-stock company of the Company,” said the producer in an official statement  to Hong Kong Stock Exchange.

It said, CMOC has further agreed to provide a loan of US$10.50 million to W-Source for the purposes of repaying its debt owe to a shareholder of Huayue and paying the consideration under the acquisition deal. The company stated, the stepped taken to increase its exposure to the growing market for battery metals.

The planned in Sulawesi is one of a series of Chinese-invested nickel smelting projects in Indonesia. The Huayue plans to produce 60,000 tons a year of mixed nickel hydroxide cobalt. Nickel and cobalt are both key ingredients in batteries for electric vehicles.

Prior the acquisition, Huaqing Nickel & Cobalt owned 58 percent of Huayue, Qingchuang International Holdings 20 percent, Woyuan Holdings 11 percent, IMIP 10 percent, and Long Sincere 1 percent.

Beside Huayue, Chinese stainless steel-maker Tsingshan Holding Group has led a group of investors to build a nickel sulfate plant to produce electric vehicle batteries in a $10 billion industrial park linked to its Weda Bay Industrial Park, in Maluku. The group includes China’ Huayou Cobalt Co., Ltd., and Zhenshi Holding Group.

The first phase of the project will produce coke and other steelmaking raw materials, as well as synthetic ammonia, the statement said, while the second phase will use crude benzene to develop polymer materials.

Tsingshan is the biggest nickel producer in Indonesia and is pursuing two separate projects to produce battery chemicals in Sulawesi. Work on the plant to produce nickel, cobalt and manganese chemicals used for battery cathodes started in January.

The plant is expected to be completed next year. Beside, Chinese battery firm GEM said was teaming up with others including Indonesia’ stainless steel producer Tsingshan on the plan, initially estimating the project would cost $700 million. The company then say the price tag may be $1 billion or more.

“The project is in progress. The investment may be slightly adjusted if we need more equipment or something else,” said Rao Mingyu, an investment assistant at GEM.

The plan is to build the 50,000 tons high-pressure acid leach (HPAL) facility at Tsingshan’ industrial park in Morowali. The consortium includes Guangdong Brunp Recycling Technology, a unit of Chinese battery maker Contemporary Amperex Technology Ltd (CATL), and Japanese trading house Hanwa.

It said the Morowali plant would cost less than previous HPAL plants because the infrastructure such as port facilities, roads, and power plants was already built.

in 2017, Indonesia and China had signed an investment agreement for $1.63 billion value. Indonesian government have actively encouraged China investors to invest in the country and support the development of industrial estate outside Java island.

The investment commitment are realized through the signing of memorandum of understanding between Tsingshan Group and Delong Group with IMIP, to build a carbon steel factory in the industrial zone of Morowali, Central Sulawesi. The carbon steel factory will have an annual installed production capacity of 3.5 million tons which costs $980 million.

Tsingshan Group also signed an agreement with Bintang Delapan Group and IMIP, to build two power plants – each with a 350 MW capacity – which cost US$650 million. Together, these projects are expected to give a boost to infrastructure development in the eastern part of Indonesia.

The establishment of the carbon steel plant is important as it will reduce the need for imports of steel for the development of infrastructure projects in Indonesia, especially in the eastern part of the country.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com