China's Huayou says Indonesia nickel project to cost less than planned

HANOI (Reuters) - Chinese firm Zhejiang Huayou Cobalt’s first nickel and cobalt project in Indonesia will enter the commissioning stage at the end of this year, with capital expenditure coming in below planned levels, a senior official said on Wednesday.

The project, on the island of Sulawesi, is one of several Indonesian nickel and cobalt plants using high-pressure acid leach (HPAL) technology that have attracted attention as a fresh source of supply for the booming electric vehicle battery sector.

“We are confident to say to the market that the capex is lower than the original design. The original design is around $1.2-1.3 billion,” said George Fang, Huayou’s executive vice chairman, speaking at an online industry conference.

He did not provide a revised figure for the plant’s cost.

“We are in the final stage of construction. We will finish all construction and start commissioning at the end of this year,” he said, noting it will take about another 12 months for the plant to ramp up to full operation.

The project, called Huayue, is a joint venture of Huayou, stainless steel giant Tsingshan Holding Group and China Molybdenum Co. It is designed to have annual capacity of 60,000 tonnes in nickel content and 7,000-8,000 tonnes of cobalt content in their nickel-cobalt hydroxide product.

“If there no was no COVID-19, we would have finished half a year earlier,” Fang said, adding that the project will source nickel mostly from the Sulawesi region.

Huayou is also building another HPAL project in Indonesia, which was announced in May, with annual capacity of 120,000 tonnes in nickel content, double the size of the Huayue plant.

“That one is at the starting stage of engineering and construction,” Fang said, adding that the project will mostly source nickel from Indonesia’ Weda Bay region, without giving an estimated timeline for when it will start production.

Tsingshan and another battery producer, announced in May as EVE Energy, are partners in this project, Fang said.

Reporting by Mai Nguyen; Editing by Kenneth Maxwell