South Korea’s leading electric vehicle battery materials producer EcoPro Group is expanding its investment in Indonesia for stable procurements of nickel from the world’s top producer of the mineral amid hopes of a trade deal between the Southeast Asian country and the US to benefit from Washington’s clean vehicle subsidies.
EcoPro Co., the group’s holding company, said on Monday that it has spent $11 million on a 9% stake in PT Green Eco Nickel, a smelter owned by China’s largest battery recycling company GEM Co. in Sulawesi, an Indonesian island east of Borneo. The purchase allows the South Korean company to secure nickel equivalent to the investment stake.
EcoPro plans to gradually increase the stake in Green Eco Nickel, which produces some 20,000 tons of nickel, and invest in another Indonesian smelter for the key EV battery mineral.
“We aim to establish a stable materials supply chain through continuous investments in nickel smelters,” said Harry Chang, managing director of EcoPro’s global resources development office, in a statement.
“We plan a stake investment in another nickel smelter in Indonesia to deal with the IRA,” said Chang, referring to the US Inflation Reduction Act.
The IRA grants customers up to $7,500 per EV if the eco-friendly vehicle is assembled in the US and the battery's minerals are either mined or processed in the US or one of its free trade partners. Indonesia, which has yet to sign a free trade deal with the US, sought such an agreement on critical EV battery minerals, especially nickel, with the world’s second-largest EV market.
EcoPro in March 2022 bought a 9% stake in PT QMB New Energy Materials in the Indonesia Morowali Industrial Park (IMIP) from GEM. QMB produces 50,000 tons of nickel a year. PT QMB New Energy Materials (Courtesy of EcoPro) EcoPro Materials plans to produce nickel sulfate, a key raw material for next-generation rechargeable batteries, based on nickel procured from Indonesia, and precursors to supply to the group’s cathode makers – EcoPro BM Co. and its joint venture with Samsung SDI Co. EcoPro EM.
EcoPro has been diversifying its supply chains through various measures such as investments in nickel smelters to stably secure raw materials and improve price competitiveness.
