Huayou Cobalt plans nickel intermediate products JV in Indonesia

Huaqing Nickel & Cobalt (Huaqing), a wholly owned subsidiary of Huayou Cobalt (Huayou), plans to invest in a joint venture called Huayue Nickel & Cobalt (Huayue) in Indonesia with four other companies, Huayou announced on the Shanghai Futures Exchange on Tuesday October 30.

The Huayue joint venture will build a laterite ore hydrometallurgy project producing intermediate products of nickel in Morowali, Indonesia. The project will have capacity to produce 60,000 tonnes per year of nickel in metal.

The joint venture is subject to the approval and administrative procedures of Chinese and Indonesian governments.

Huaqing will own 58% of Huayue, with the rest of the shares belonging to Qingchuang International Holdings (20%), Woyuan Holdings (11%), Indonesia Morowali Industrial Park (10%) and Long Sincere (1%), according to Huayou.

The hydrometallurgy project will be implemented in two phases. The first phase will produce 30,000 tpy of nickel in metal and the second phase will expand capacity to 60,000 tpy of nickel in metal. No details are yet available for when the project will commence construction or production.

The joint venture will invest in Indonesia’s nickel smelting and deep processing and provide a reliable source for the development of the company’s new energy lithium-ion battery materials business, Huayou said.

Laterite ore supply will come from mines owned by Qingchuang International Holdings, Indonesia Morowali Industrial Park and their affiliates at current market prices.

Meanwhile, the sale of the project’s products will be assigned to Huaqing and Woyuan Holdings.

Battery raw materials
This latest plan follows a number of other joint ventures by Huayou in the lithium-ion and battery raw materials sectors this year.

Earlier in January, Huayou and Posco announced plans to invest in two joint ventures in China to meet mounting demand for lithium-ion battery materials.

Later in April this year, Huayou said it will invest in another two joint ventures with LG Chem to produce lithium-ion battery materials in response to the electrical vehicle (EV) boom.

Expectations for a surge in demand for renewable batteries and EV have generated great positive market sentiment for nickel and its intermediates.

Intermediate products of nickel are mainly used to produce nickel sulfate, a key component of lithium-ion batteries.

Nickel sulfate output is expected to increase rapidly in the next two years, with the supply of raw materials said to be adequate for production in the near term because most refineries will be able to call on existing stocks until 2020, chief analyst of Chinese research organization Antaike Xu Aidong said at Antaike’s Battery Materials Conference in Shaoxing, China in July. 

Global nickel sulfate production totaled about 540,000 tonnes in 2017 and Xu forecasts the total to rise by about 100,000 tonnes this year, which equates to demand of about 20,000 tonnes of nickel briquette.

Fastmarkets assessed the price of Chinese nickel sulfate at 25,200-25,600 yuan ($3,615-3,673) per tonne on Tuesday, down from 25,400-25,700 yuan per tonne a week prior, mainly due to the decline in the London Metal Exchange three-month nickel price as well as slight oversupply.