BASF abandons multibillion-dollar nickel-cobalt refining project in Indonesia amid market shift
European multinational company BASF has decided to abandon a multi-billion-dollar plan to develop a nickel-cobalt refining complex in Indonesia.
Citing a dramatic decrease in the nickel market, the world’s largest chemical producer announced it would cease further evaluation of its potential investment in the Weda Bay refinery.
BASF and global mining and metallurgical group Eramet signed an agreement in 2020 to jointly assess the potential of this significant project.
Nickel market shift
“After a thorough evaluation, we have concluded that we will not pursue the nickel-cobalt refining project in Weda Bay,” said BASF board member Anup Kothari.
“Since the inception of the project, the global nickel market has changed significantly; […] supply options have evolved and, with that, BASF’s availability of battery-grade nickel.”
“Consequently, BASF no longer sees the need to make such a substantial investment to ensure a resilient metal supply for its battery materials business,” he added.
The company will stop all ongoing evaluation and negotiation activities for the project in Weda Bay.
President of BASF’s catalysts division Dr Daniel Schönfelder said the company remains focused on identifying a secure, responsible and sustainable supply of critical raw materials for the production of precursor cathode active materials.
Still on the radar
He indicated that this supply might still originate from Indonesia.
“BASF’s battery materials business operates a dedicated sourcing team, which focuses on metals and precursor management as well as trading and has already developed a robust network of partners to ensure a resilient supply of critical raw materials necessary for its growing global cathode active materials business.”
The planned plant would have produced mixed hydroxide precipitate (MHP) from nickel.
MHP is used in the production of nickel sulphate, a raw material for cathode precursor production.
The $3.9 billion plant was being assessed for the annual provision of 42,000 metric tonnes of nickel and 5,000mt of cobalt.
Ironic twist
The decision to cease planning for the multi-billion-dollar plant due to the collapse of the global nickel market is somewhat ironic considering that Indonesia’s oversupply of the metal is considered to be the direct cause of the pricing issues.
Prices for the metal dropped below $24,000/t at their lowest point, an unprecedented two-year decline from the March 2022 peak when prices briefly exceeded $159,000/t before levelling out at nearly $75,000/t.
Eramet said it would continue to evaluate potential investments across the nickel / electric vehicle battery value chain in Indonesia.
Group chief development officer Geoff Streeton says Indonesia remains poised to play a pivotal role in the future of the global nickel market.
“Eramet remains focused on sustainably optimising the resource potential of the Weda Bay mine to supply ore to local nickel producers, while also further investigating opportunities in Indonesia,” he said.