Zhejiang Huayou Cobalt Co., one of the world’s largest producers of nickel, is in talks with banks to raise approximately $2.7 billion for its battery-nickel facility project in Indonesia, which is backed by Ford Motor Co. and PT Vale Indonesia, according to sources familiar with the matter.
HSBC Holdings Plc and Standard Chartered Plc are arranging the financing and are inviting additional banks to join the syndicate for the project in Southeast Sulawesi. The facility is part of a broader effort by Huayou, Ford, and Vale to produce battery-grade nickel, an essential component for electric vehicle (EV) batteries. Indonesia, the world’s largest nickel producer, has been aggressively courting foreign investment to develop its domestic nickel processing industry, which has grown significantly over the past decade.
While Huayou, HSBC, and Standard Chartered have not yet responded to requests for comment, the financing push comes at a time when nickel prices are near a four-year low. This decline is partly due to softer demand from the stainless steel sector and slower-than-expected growth in the electric vehicle market.
The Pomalaa plant, which will use high-pressure acid leaching (HPAL) technology, is expected to produce 120,000 tons of nickel annually, making it one of the largest HPAL projects in Indonesia. The total investment for the project is estimated at around $3.8 billion. Huayou currently holds a 73.2% stake in the project, while Vale holds 18.3%, and Ford owns an initial 8.5% stake, with an option to increase its holding to 17%.
Construction of the Pomalaa facility is expected to take about three years, although Huayou has not provided a specific updated timeline. Preliminary work on the project began earlier this year.
As the demand for EVs continues to rise, securing financing for such projects is becoming crucial to meet future nickel supply needs, especially given Indonesia’s pivotal role in the global nickel market.
