Eramet Relies on Chinese Partners for Competitive Nickel Production
French mining company Eramet has highlighted the importance of its Chinese partners in ensuring competitive nickel production and maintaining profitability. According to Jérôme Baudelet, chief executive of Eramet Indonesia, Chinese companies are essential in keeping costs manageable and ensuring the viability of operations. "The risk is not being competitive and to have a much higher capex. So you have to be pragmatic," Baudelet told the Financial Times.
Eramet operates the Weda Bay nickel mine in Indonesia in collaboration with Chinese conglomerate Tsingshan Holding Group. The Weda Bay mine, located on the island of Halmahera, began production in 2019 and set a record high of 36.3 million wet tonnes of output last year, according to Kallanish Power Materials. The operation is considered the largest nickel mine in the world and is majority-owned by Tsingshan.
In addition to the mining operation, the joint venture, which includes Indonesia's state-owned PT Antam, opened a nickel ore smelting plant in 2020. The smelter employs pyrometallurgical technology, specifically Rotary Kiln-Electric Furnace (RKEF), to produce approximately 30,000 tonnes of nickel per year.
Baudelet emphasized that Chinese technology, expertise, and equipment have been instrumental in maintaining profitability, particularly during challenging market conditions. "They also have economies of scale in all the equipment they build for those plants," he added.
Tsingshan's development of high-pressure acid leach (HPAL) technology has further revolutionized the nickel industry, enabling the efficient production of battery-grade nickel from lower-quality ores that would typically be used for steelmaking. Western companies, including those in New Caledonia and Australia, have encountered significant difficulties attempting to deploy this technology, often due to high costs and technical challenges.
Baudelet noted that Western companies could achieve profitability if Chinese companies build and potentially operate the production facilities, given their extensive expertise and established infrastructure.
Earlier in 2024, Eramet and German chemical giant BASF decided to abandon their plans for a joint nickel-cobalt refining complex in Weda Bay. Eramet shifted its focus back to ore mining, while BASF cited evolved supply options, making the $2.6 billion investment unnecessary for securing battery-grade nickel supply.
