Ford has partnered with PT Vale Indonesia, a mining company, and Chinese firm Huayou Cobalt to secure nickel for electric car batteries from Indonesia. The three companies are investing in a nickel processing plant in Pomalaa, in Southeast Sulawesi, where Vale operates a nickel mine. The plant is expected to produce up to 120,000 tonnes per year of a nickel intermediate product for use in nickel-rich battery cathodes. The total investment is expected to be 67.5 trillion Indonesian rupiah, or around 4.1 billion euros.
The project is subject to regulatory approval and construction is scheduled to begin in 2023, with operations starting in 2026. Ford’s Vice President for Model e EV Industrialisation, Lisa Drake, said that the deal will help the company to “ensure the nickel is mined in line with our company’s sustainability targets, setting the right ESG standards as we scale.”
The ground-breaking ceremony for the plant took place in 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”.
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. 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. BASF and the French mining company Eramet, among others, are flirting with Indonesian nickel deposits, as are SK On, CATL and LG.
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. The deal also marks Ford’s first investment in the Southeast Asian country.
See also: Vale Signs Deal with Tesla To Supply Nickel from its Canadian operations for EVs batteries
According to Febriany Eddy, CEO of PT Vale Indonesia, the agreement shows that “it’s not just about what we mine – but how we do it.” He added that the collaboration with Ford and Huayou will make 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.
