SK On, EcoPro, China’s GEM to build battery materials plant in Indonesia

SK On Co., a South Korean electric vehicle (EV) battery maker, has joined forces with two energy materials companies to build a nickel intermediate plant in Indonesia.

SK said on Friday it had signed an MOU with Korean energy materials producer EcoPro Co. and Chinese precursor producer GEM Co. to launch a three-way joint venture in Indonesia, the world’s largest nickel-producing country.

The plant, to be located within the Morowali industrial complex in Sulawesi Province, will produce nickel and cobalt hydroxide (MHP), in an amount equivalent to 30,000 tons of pure nickel each year, starting in the third quarter of 2024. That amount is enough to produce 43 gigawatts (GWh) of batteries for about 600,000 EVs.

MHP is drawing attention as a key raw material for nickel sulfate, used in the production of precursors for batteries, because it is more stable and costs less than other intermediate materials.

A precursor is a material created by mixing nickel, cobalt and manganese, and is added to lithium to make cathodes, the positive end of a lithium-ion battery.

The three companies plan to secure nickel oxide ore from Sulawesi's Hengjaya mine and use it to manufacture MHP.

SK said the partners are also considering producing nickel sulfate and precursors in Korea to meet the requirements of the US Inflation Reduction Act (IRA).

The act, signed into law in August, requires that a certain percentage of the critical minerals used in EV batteries originate from the US or its free trade partners.

“The cooperation between Korea and China is meaningful in that the three companies established a stable nickel supply chain at a time when raw materials procurement is becoming increasingly precarious globally,” said an EcoPro executive.

Write to Hyung-Kyu Kim at khk@hankyung.com
In-Soo Nam edited this article.