Developers will start building a lithium battery project with an investment of $4 billion in Morowali, on the Indonesian island of Sulawesi, on Jan. 11, Reuters reported.
Coordinating Maritime Minister Luhut Pandjaitan said on Friday that the $4 billion project involves investors from South Korea, Japan and China.
Major nickel producers are eyeing Indonesia’s large nickel laterite ore reserves – prized for nickel pig iron used in stainless steel production – for use in battery materials.
Nickel is also a vital ingredient for the lithium-ion batteries used to power electric vehicles, where demand is set to accelerate over coming years.
Indonesia, with reserves of both nickel and cobalt used in lithium battery cathodes, is well positioned to meet that demand amid advancements in electric vehicle technology, the minister said.
The Morowali site where the proposed battery plant would be located currently has 20 nickel ore processing facilities that feed 1.5 million tonnes of nickel pig iron a year into a 3-million tonne-per-year stainless steel mill.
Chinese battery firm GEM said in late September that it was teaming up with four companies to invest a total of $700 million in a project to produce battery-grade nickel chemicals in Morowali.
That project would be undertaken alongside units of top Chinese lithium battery maker Contemporary Amperex Technology and Chinese stainless steel-maker Tsingshan Holding Group.
Tsingshan, already Indonesia’s biggest nickel producer, is leading a group seeking investors for a nickel sulphate plant in a $10 billion industrial park linked to its Weda Bay concession on the island of Halmahera, the group said in August.
Pertamina, Indonesia’s state energy company, may team up with state miner Aneka Tambang to make batteries.