Ford to source nickel from Indonesia

Ford secures nickel for electric car batteries from Indonesia. The carmaker is investing with mining company PT Vale Indonesia and Chinese company Huayou Cobalt in a nickel processing plant in Pomalaa in Southeast Sulawesi, where Vale operates a nickel mine.

Subject to regulatory approval, the project is expected to produce up to 120,000 tonnes per year of a nickel intermediate product for use in nickel-rich battery cathodes. Construction is still scheduled to begin in 2023, with operations starting in 2026. The total investment is expected to be 67.5 trillion Indonesian rupiah, the equivalent of about 4.1 billion euros. It is unclear how much each of the three shareholders will contribute. The news agency Reuters only reported that Vale holds a 30 per cent share in the project and the rest is controlled by Ford and Huayou.

The ground-breaking ceremony for the plant took place as early as November 2022 under the direction of Vale and Huayou. The duo has also already initiated preparatory work, they say. The actual start of construction, however, will not follow until this year, according to Ford. In addition to the plant project, the US carmaker says it is currently negotiating a separate supply agreement with Huayou “for a precursor cathode active material critical to manufacturing lithium-ion batteries”. It is likely that this is also a nickel product. This is supported by the group’s raw material procurement plans from mid-2022.

Ford wants to reach a production rate of 2 million electric cars by the end of 2026 and increase further thereafter. The deal in Indonesia, along with nickel sourced by Ford from other sources, is expected to “make a significant contribution to achieving these EV production targets”, the company says. It is Ford’s first investment in the Southeast Asian country.

“This framework gives Ford direct control to source the nickel we need – in one of the industry’s lowest-cost ways – and allows us to ensure the nickel is mined in line with our company’s sustainability targets, setting the right ESG standards as we scale,” expresses Lisa Drake, vice president for Ford Model e EV industrialisation.

For Febriany Eddy, CEO of PT Vale Indonesia, the agreement shows that “it’s not just about what we mine – but how we do it.” The result, he said, is a unique collaboration with Ford and Huayou. “This global co-operation is in line with Indonesia’s vision to build a domestic EV ecosystem and makes PT Vale an important contributor toward addressing the world’s decarbonization challenge, with an investment that will generate local economic benefits and ensure the optimal utilization of Indonesia’s nickel resources.”

The plant to process the nickel mined nearby is considered a “national strategic project” in Indonesia and is expected to create 12,000 construction jobs. Indonesia is known to have the largest nickel reserves in the world and banned the export of unprocessed nickel ore in 2020 in order to build its own industry. BASF and the French mining company Eramet, among others, are flirting with Indonesian nickel deposits, as are SK On, CATL and LG.


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