Nickel miner Vale Indonesia signs HPAL deal with China's Huayou

JAKARTA (Reuters) - Nickel miner PT Vale Indonesia on Tuesday signed an agreement with China’s Zhejiang Huayou Cobalt to build a second high-pressure acid leach (HPAL) plant to produce nickel material used in batteries to power electric vehicles.

A worker poses with a handful of nickel ore at the nickel mining factory of PT Vale Tbk, near Sorowako, Indonesia, January 8, 2014. REUTERS/Yusuf Ahmad

Under the heads of agreement, Vale and Huayou plan to build an $1.8 billion HPAL plant in Sorowako, South Sulawesi, to produce 60,000 tonnes of nickel in mixed hydroxide precipitate (MHP), chief executive Febriany Eddy told reporters.

Vale in April had also signed a deal with Huayou to develop an HPAL plant in Pomalaa, Southeast Sulawesi, to produce 120,000 tonnes of MHP. U.S. carmaker Ford Motor Co. later joined the partnership for this plant.

Similar to the agreement for Pomalaa, Huayou would also build the plant in Sorowako with Vale reserving the rights to buy stake at the plant, chief financial officer Bernardus Irmanto added.

Febriany said a final investment decision (FID) for the Pomalaa plant is expected by the end of this year and a FID for Sorowako to follow next year.

Construction of each plant would take around three years at the most, she said.

“These are strategic projects for Vale because they will produce MHP, which is a material for electric car batteries,” Febriany added.

Indonesia is keen to utilise its rich nickel reserves to attract investment into metal processing, production of electric vehicle battery material and ultimately building EVs in the country.

The government had banned exports of unprocessed nickel ore to ensure sufficient supplies for investors, which include major metal companies from China, as well as South Korean companies such as LG Energy Solution and Hyundai Motor.

Last week, Vale also signed a $2.1 billion deal with China’s Shandong Xinhai Technology and a unit of China Baowu Steel Group to build a refinery to produce ferronickel.

Vale’s most recent nickel refinery deals:

Location Investment Partners Planned Expected

capacity completion

Bahodopi, $2.1 bln Shandong Xinhai 73,000 2025

Central Technology Co. tonnes to

Sulawesi Ltd, Taiyuan 80,000

iron & Steel tonnes of

Co. Ltd (a unit nickel in

of China Baowu ferronickel

Steel Group)

Pomalaa, $4.5 bln Zhejiang Huayou 120,000 2025

Southeast for mine, Cobalt, Ford tonnes of

Sulawesi refinery Motor Co. nickel in

and other mixed

facilities hydroxide



Sorowako, $1.8 bln Zhejiang Huayou 60,000 2026

South Cobalt tonnes of

Sulawesi nickel in


Reporting by Fransiska Nangoy, Bernadette Christina Munthe; Editing by Ed Davies