China's Huayou invests in $2.1 bln Indonesia nickel project

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  • Huayou to partner EVE Energy, Tsingshan in new smelting venture
  • Project aims to produce 120,000 T nickel, 15,000 T cobalt a year
  • Huayou to pay $210 mln for stake in China battery materials firm

May 24 (Reuters) - China's Zhejiang Huayou Cobalt Co (603799.SS) said on Monday it would partner electric vehicle battery maker EVE Energy (300014.SZ) and others in a $2.08 billion nickel and cobalt project in Indonesia.

The company is also splashing out $210 million on a stake in Chinese battery materials producer Tianjin B&M Science and Technology Co (B&M) as it makes investments across the rechargeable battery supply chain.

Huayou will hold 20% of the Indonesian venture, tentatively called PT Huayu Nickel Cobalt. It is the cobalt producer's third battery nickel smelting project in Indonesia, which is becoming an important centre for battery chemicals.

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The latest site will be at Weda Bay on Halmahera island where Huayou already partners Tsingshan Holding Group in a nickel sulphate project. It aims to produce 120,000 tonnes of nickel and 15,000 tonnes of cobalt annually on a metal content basis, Huayou said in a Shanghai Stock Exchange filing.

EVE will have a 17% stake, while the other partners are Yongrui Holdings with 31%, Glaucous International Pte Ltd with 30% and Lindo Investment Pte Ltd with 2%.

Yongrui is wholly-owned by Yongqing Technology Co, a subsidiary of Tsinghan, the biggest nickel producer in Indonesia and the world's top stainless steel maker.

"While Huayou is only holding a 20% stake in the project, we would like to highlight that this project is massive in size," Daiwa Capital Markets said in a note.

Huayou's filing did not say when the project would begin operating.

The company will also be part of a consortium led by South Korea's LG (003550.KS) building a $1.2 billion battery plant near Jakarta, Indonesia's investment minister said on Monday. read more

In a separate filing on Sunday, Huayou said it would pay Hangzhou Hongyuan Equity Investment 1.35 billion yuan ($210 million) for a 38.62% stake in B&M.

Huayou's parent will also transfer voting rights for its 26.4% stake in B&M to Huayou, effectively giving it control of the firm it had sought to acquire in 2019 before ditching the plan.

($1 = 6.4309 Chinese yuan)

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Reporting by Tom Daly; Additional reporting by Min Zhang and Mai Nguyen; Editing by Christian Schmollinger

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