Zhejiang Huayou Seeks $2.7 Billion for Indonesia Nickel Plant Backed by Ford
Zhejiang Huayou Cobalt, among the largest nickel producers globally, is in discussions with banks for $2.7 billion in financing for its Ford-backed battery-grade nickel project in Indonesia, sources familiar with the matter have indicated. The project aims to boost nickel production for electric vehicles.
HSBC and Standard Chartered are arranging the loan and inviting additional banks to join in funding the battery-nickel facility in Southeast Sulawesi. The facility, a partnership involving Huayou, Ford, and Indonesian mining firm PT Vale, will use high-pressure acid leaching (HPAL) technology to produce nickel chemicals from low-grade ores. The Pomalaa plant, as it is known, is projected to have an annual nickel output of 120,000 tons, making it one of Indonesia's largest HPAL projects.
Indonesia, which accounts for over half of the world's nickel supply, has been actively seeking to draw foreign investment to its domestic processing sector. The partnership with Ford and Vale is a major step in this push, providing nickel for electric vehicle production. Total investment for the project is estimated at $3.8 billion, with Huayou holding a 73.2% stake, Vale 18.3%, and Ford initially holding an 8.5% stake, which can be increased to 17% in the future.
The fundraising comes as nickel prices hover near four-year lows, impacted by weak stainless steel market demand and slower-than-expected growth in the electric vehicle sector. Despite this, preliminary construction work on the Pomalaa plant has begun, although Huayou has not provided an updated completion timeline.
