French mining company Eramet and German chemical giant BASF have decided to withdraw from their planned joint investment in a nickel-cobalt refining complex in Weda Bay, Indonesia. This decision, announced on June 24, 2024, came after a thorough assessment of the project’s feasibility and the prevailing market conditions.
The main reason for halting the project is the anticipated short-term oversupply of nickel, caused by a temporary slowdown in electric vehicle (EV) market demand—a phase often described as the “chasm.” BASF noted that with an improving global supply of nickel for EV batteries, the need for their investment in the Indonesian plant has decreased.
Although Eramet has canceled this particular project, the company indicated that it would continue to pursue potential investments within Indonesia’s nickel EV battery value chain and will update the market when appropriate. The original plan, announced in January 2023, involved a $2.6 billion investment to build a high-pressure acid leach (HPAL) facility with an annual production target of 67,000 tons of nickel and 7,500 tons of cobalt.
Indonesian officials suggested that the decision might also have been influenced by the presence of existing and planned HPAL facilities in the country, which could make obtaining mixed hydroxide precipitate (MHP) easier without requiring significant new capital expenditure.
This development mirrors broader trends in the global nickel market. Indonesia’s share of nickel mine supply has increased significantly, from 26% in 2018 to 55% in 2023, and the production of nickel intermediates has more than doubled during this period. Despite an expected 8.7% rise in global nickel production this year, demand growth is forecasted to lag at around 4%.
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