China's Zhejiang Huayou Cobalt Co said on Monday it would partner electric vehicle battery maker EVE Energy and others in a $2.08-billion nickel and cobalt project in Indonesia.
The company is also splashing out $210-million on a stake in Chinese battery materials producer Tianjin B&M Science and Technology Co (B&M) as it makes investments across the rechargeable battery supply chain.
Huayou will hold 20% of the Indonesian venture, tentatively called PT Huayu Nickel Cobalt. It is the cobalt producer's third battery nickel smelting project in Indonesia, which is becoming an important centre for battery chemicals.
The latest site will be at Weda Bay on Halmahera island where Huayou already partners Tsingshan Holding Group in a nickel sulphate project. It aims to produce 120,000 tonnes of nickel and 15,000 tonnes of cobalt annually on a metal content basis, Huayou said in a Shanghai Stock Exchange filing.
EVE will have a 17% stake, while the other partners are Yongrui Holdings with 31%, Glaucous International Pte Ltd with 30% and Lindo Investment Pte Ltd at 2%.
Yongrui is wholly-owned by Yongqing Technology, a subsidiary of Tsinghan, the biggest nickel producer in Indonesia and the world's top stainless steel maker.
"While Huayou is only holding a 20% stake in the project, we would like to highlight that this project is massive in size," Daiwa Capital Markets said in a note.
Huayou is also involved in the Huayue nickel and cobalt project on the island of Sulawesi with Tsingshan and China Molybdenum Co. Its filing did not say when the latest Weda Bay project would begin operating.
In a separate filing on Sunday, Huayou said it would pay Hangzhou Hongyuan Equity Investment 1.35-billion yuan ($210-million) for a 38.62% stake in B&M.
Huayou's parent will also transfer voting rights for its 24.4% stake in B&M to Huayou, effectively giving it control of the firm it had sought to acquire in 2019 before ditching the plan.