BASF and Eramet to build $2.6 billion nickel smelter in Indonesia

The world’s largest chemical group BASF SE and mining and metals company Eramet SA are set to invest up to $2.6 billion to build a nickel-cobalt plant in Indonesia, boosting investment in the Southeast Asian country to meet the growing demand for electric vehicles.

According to plans, the plant will produce about 67000 tons of nickel and 7500 tons of cobalt per year. The companies want to complete the plant agreement in the first half of this year, according to BASF chief executive Martin Brudermüller.

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Indonesia is working hard to become the global center of the electric vehicle supply chain. Already, the country is developing many projects for the production of nickel for batteries, many of which are supported by China.

Tesla Inc. and Chinese BYD Co. have almost completed deals on the construction of automobile plants in Indonesia.

BASF-Eramet’s Sonic Bay plant will produce nickel chemicals in a high-pressure acid leach plant, with a total planned investment of $2.2 billion to $2.6 billion, according to the announcement. Construction is planned on Veda Bay in North Maluku.