China’s Ganfeng Lithium Co Ltd 002460.SZ, 1772.HK, the world’s biggest lithium company by market capitalisation, is considering making nickel chemicals for electric vehicle (EV) batteries in Indonesia, its vice chairman told Reuters.
Ganfeng earlier this year agreed to buy nickel ore from Indonesia-focused miner Silkroad Nickel Ltd SILK.SI and is set to invest up to $30 million in the Singapore-listed company.
“We are about to close the deal and after that we are studying making downstream chemicals,” Wang Xiaoshen said in an interview for the upcoming Reuters IMPACT conference.
The move would see Ganfeng, which supplies lithium to automakers including U.S. EV leader Tesla Inc TSLA.O, add production of another battery metal to its portfolio and become the latest Chinese company to pursue nickel smelting in Indonesia.
“Of course, we are closely watching the Indonesian national policy for nickel exports,” Wang said. “So we will decide when the policy is clear what product is suitable to be produced in Indonesia. Definitely that would be supplies for the battery supply chain.”
Indonesia, the world’s biggest nickel miner, banned exports of nickel ore from 2020 to process more resources at home and set up a complete EV battery supply chain.
In addition, Indonesia is exploring levying an export tax on nickel products with less than 70% nickel content.
“We are evaluating all the options, including building the process ourselves” or third-party processing, Wang said.
Ganfeng occasionally buys nickel for production of nickel-cobalt-manganese (NCM) battery precursors to supplement its main source of supply – battery recycling, Wang explained.
To make the precursor business scalable, some nickel and cobalt will have to come from a more stable source, he said.
News that Ganfeng is thinking of producing nickel chemicals comes as one of the biggest investors in that space, Tsingshan Holding Group, is venturing into lithium in Indonesia.
Wang said it was “natural” for newcomers to join the industry given high lithium prices AM-995C-LCTC, which are up almost 200% this year on resurgent demand.
Ganfeng has also faced competition from an unnamed battery maker over its latest acquisition target, Argentina-focused Millennial Lithium Corp ML.V. It has until Monday to match or better the battery maker’s offer for Millennial, which was higher than its own.
“We still have not made the final decision but we believe our original offer is a reasonable price,” Wang said on Friday. “Even if the market is very hot we still need to keep our mind cool.”
