Workers at the site - Photo by Sumitomo Metal Mining Co., Ltd - Photo by Sumitomo

JAKARTA (TheInsiderStories) – Japan’s miner Sumitomo Metal Mining Co., Ltd., planned to invest US$1.8 billion on EV battery  businesses in Indonesia. The miner has conducted a pre-feasibility study along with PT Vale Indonesia Tbk (IDX: INCO) to build a nickel processing plant in Pomalaa, Southeast Sulawesi.

The plant would make an intermediate nickel and cobalt product that would then be processed into nickel sulphate for batteries. Vale is working on obtaining environmental permits for the proposed 40,000-tonne smelter which will process ore extracted using high-pressure acid leaching (HPAL).

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

Jointly with France’s Eramet SA and local miner PT Aneka Tambang Tbk (IDX: ANTM), Tsingshan has planned to develop nickel smelter through its unit PT Weda Bay Nickel. The construction of this smelter will be carried out in two stages starting this year.

Recently, Indonesian Government aimed to develop electric cars  to reduce emissions. For that the country is drafting a regulation that will slash the luxury goods sales tax and import duty of electric car, as an attempt to stimulate the development in Indonesia.

Industry Minister Airlangga Hartarto said Government to slash the luxury tax to 0 per cent and import duty to 5.0 per cent and its expect will be finalized within one month. Indonesia is still far behind in the development of the electric cars. Industry players have blamed lack of infrastructure support, such as charging points or stations, which discouraged car makers to produce electric cars.

Some industry players also demand the government to provide incentives in order to lure car makers to produce electric cars. Such incentives are needed to encourage car makers to produce electric cars and catch up with other countries.

Globally, China has taken the lead in developing electric cars. Goldman Sachs has said that China is expected to supply 60 per cent of the world’s electric vehicles by 2030, up from 45 per cent in 2016.

He said the plan to develop electric car has already been included in the country’s national vehicle industry roadmap. The government needs to look at the readiness of electric cars component producers, such as battery and power control unit, before issuing new regulations.

Hartarto said the government targets that by 2025, around 20 per cent of cars produced in Indonesia will be low carbon emission vehicles, including electric cars.

Established in July 1968, Vale is a company with a license from the Government of Indonesia to explore, mine, process and produce nickel. As sole contractor of the Government in the areas covered by the Contract of Work (CoW), has been granted exclusive rights in specified areas on the Island of Sulawesi.

Vale is a subsidiary of Vale Canada Ltd., a multi-mining corporation headquartered in Brazil. Vale is a global leader in iron ore production and second largest nickel producer in the world.

The company operates one of the world’s largest integrated lateritic nickel mining and processing operations, located near Sorowako on the Island of Sulawesi. Its business operations consist of mining and processing ore to nickel in matte product, a product used in making refined nickel.

The processing plant, located at Sorowako, includes three oil-fired rotary dryers, five oil-fired reduction kilns, four electric furnaces and three Pierce-Smith converters. All nickel in matte production is committed to be sold to Vale Canada and SMM, with sales agreement​s that provide for 80 percent of our annual production being purchased by Vale Canada and 20 percent by SMM, based on a formula derived from the London Metal Exchange  price.