French mining company Eramet and German chemical giant BASF have decided to cancel their joint $2.6 billion investment project to build a nickel-cobalt refining complex in Weda Bay, Indonesia.
In a news release, Eramet stated that after a thorough evaluation, including discussions about the project execution strategy, both partners have decided against the investment.
Eramet said it will continue to evaluate potential investments in the nickel electric vehicle (EV) battery value chain in Indonesia and will keep the market informed in due course.
An Indonesian government official, Septian Hario Seto, from the Coordinating Ministry of Maritime and Investment Affairs, said the companies have informed the government about their decision. Seto noted that there are already several high pressure acid leach (HPAL) facilities in the country, and more are in the pipeline.
According to Seto, the cancellation was likely due to the fact that there is already a lot of HPAL capacity in Indonesia, making it easier for companies to obtain mixed hydroxide precipitate (MHP) without the need to invest in large capital expenditures to build their own facilities.
In January 2023, Indonesian officials had said that Eramet and BASF were close to finalizing the $2.6 billion investment project, which was based on resources extracted from Eramet’s mine in Weda Bay. Eramet had previously confirmed that negotiations were underway, but the project was subject to a final investment decision.
The cancellation of this project comes as Indonesia, a nickel-rich country, is actively working to build a domestic EV industry, with several Chinese companies and their local partners investing in HPAL facilities in the country.