Indonesia's Inalum, Antam may tie up with Zhejiang Huayou to process nickel

JAKARTA (Reuters) - Indonesian state mining holding company PT Inalum may form a partnership with China’s Zhejiang Huayou Cobalt Company Ltd to process nickel into chemicals for electric vehicle batteries, the State-Owned Enterprises (SOE) Ministry said on Friday.

Indonesia is encouraging investments in its nickel processing sector to produce battery chemicals to position itself in the global supply chain of electric vehicles.

Inalum, along with state-controlled miner PT Aneka Tambang (Antam), and Zhejiang Huayou are planning to build a high pressure acid leaching (HPAL) plant and a rotary kiln-electric furnace to process nickel ore, the SOE said in a statement. The announcement was issued after SOE Minister Rini Soemarno met with Zhejiang Huayou officials in China .

Currently there are at least four HPAL plants under development or study by local and foreign companies, with a plant by China’s steel giant Tsingshan Group in Central Sulawesi potentially starts operation in 2020.

The partnership with Huayou would support Indonesian government efforts to have mining companies build more ore processing facilities to produce higher-value finished products rather than exporting ore.

“In order to carry out the mandate of the mining industry holding to carry out downstreaming, Inalum continues to aggressively look for strategic partners who can provide access to the technology and have good expertise,” Inalum’s Chief Executive Budi Gunadi Sadikin said in the statement.

Antam’s Corporate Secretary Kunto Hendrapawoko told Reuters in a text message that the partnership is still in the exploratory stage and no details have been decided yet.

“Antam continues to seek opportunities to cooperate in expansion and downstream development, especially in nickel,” he said.

Reporting by Bernadette Christina, Wilda Asmarini; writing by Fransiska Nangoy; editing by Christian Schmollinger