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China's Lygend pushes back Indonesia nickel project to March 2021

* Plant on Obi island was due to begin production in Q3 2020

* Coronavirus has hampered Chinese firms’ operations overseas

* Lygend plans to commission NPI plant in Indonesia in 2022

NANJING/BEIJING, China, Nov 4 (Reuters) - China’s Lygend Resources & Technology Co Ltd will not begin operating a nickel smelter at a project planned for eastern Indonesia until March 2021, a six-month delay, after the coronavirus slowed work, an executive said on Wednesday.

“If there was no pandemic our products would have been delivered to customers already,” Liu Feng, the company’s vice general manager, told the China International Nickel and Cobalt Conference in Nanjing.

Located on the island of Obi, the Lygend plant is one of a number of Chinese-backed high-pressure acid leach (HPAL) projects for processing nickel ore in Indonesia that have caught the attention of the global market since 2018 because of their low budgets and ambitious start-up targets.

The HPAL process will produce mixed hydroxide precipitate (MHP), an intermediate product containing both nickel and cobalt. Lygend and Indonesian partner Harita Group also plan to produce nickel and cobalt sulphate, chemicals used electric-vehicle batteries, on Obi.

Their project was expected to be the first of the Indonesian HPAL ventures to start production but coronavirus-related travel restrictions have made it difficult for Chinese firms to send key workers overseas this year.

Lygend had previously said start-up would occur in the third quarter of 2020 but now envisages a test run of its equipment next spring before MHP is delivered to Chinese customers from May, Liu said. Customers include China’s GEM Co Ltd.

Liu said Lygend is aiming to reach annual capacity of 30,000-37,000 tonnes of MHP in the second half of 2021.

The Obi partners have not yet decided how to dispose of their tailings - the crushed remnants of mineral ore - but that will not delay the project, he added.

Separately, Lygend and Harita aim to put into production another Indonesian project that will make 80,000-85,000 tonnes per year of nickel pig iron, a raw material for stainless steel production, in March to May 2022, Liu said. (Reporting by Min Zhang and Shivani Singh; writing by Tom Daly and Mai Nguyen; Editing by Christian Schmollinger)