South Korea’s EcoPro Group, a major player in electric vehicle (EV) battery materials, is boosting its investment in Indonesia to ensure a stable supply of nickel, a crucial mineral for EV batteries. The move comes amidst anticipation of a potential trade agreement between Indonesia and the US, which could benefit Washington’s push for clean vehicles.
EcoPro Co., the holding company of the group, announced on Monday that it has acquired a 9% stake in PT Green Eco Nickel, a nickel smelter owned by China’s leading battery recycling firm GEM Co., located in Sulawesi, Indonesia. The investment, totaling $11 million, grants EcoPro access to nickel equivalent to its stake in the smelter.
With plans for further expansion, EcoPro intends to gradually increase its ownership in Green Eco Nickel, which currently produces around 20,000 tons of nickel annually. Additionally, the company aims to invest in another nickel smelter in Indonesia to bolster its EV battery mineral supply chain.
Harry Chang, Managing Director of EcoPro’s Global Resources Development Office, emphasized the goal of establishing a reliable materials supply chain through ongoing investments in nickel smelters. He also mentioned the group’s intention to address the implications of the US Inflation Reduction Act (IRA) by investing in Indonesian nickel smelters.
Under the IRA, customers can receive up to $7,500 per EV if the vehicle is assembled in the US and its battery minerals are sourced from the US or one of its free trade partners. Indonesia, eager to strike a trade deal with the US, particularly on critical EV battery minerals like nickel, is seeking such an agreement.
EcoPro anticipates the need to secure approximately 100,000 tons of nickel annually to meet its production targets, as its subsidiary EcoPro Materials Co. aims to produce 200,000 tons of EV battery materials by 2027.
In March 2022, EcoPro Group acquired a 9% stake in PT QMB New Energy Materials, located in the Indonesia Morowali Industrial Park, which produces 50,000 tons of nickel annually.
EcoPro Materials plans to utilize nickel sourced from Indonesia to produce nickel sulfate, a vital raw material for next-generation rechargeable batteries. The produced precursors will be supplied to EcoPro BM Co. and its joint venture with Samsung SDI Co., EcoPro EM, to manufacture cathodes.
Through strategic investments in nickel smelters, EcoPro aims to diversify its supply chains, ensuring a stable supply of raw materials and enhancing price competitiveness.
