The project to construct an HPAL plant for processing nickel and cobalt is poised to be a milestone for Indonesia’s downstream raw materials industry. PT Merdeka Battery Materials secured a secured loan worth USD 1.4 billion to finance a new facility on the island of Sulawesi. The plant will produce nickel and cobalt chemicals used in the manufacturing of electric vehicle batteries. This strategic move comes at a time when Indonesia, responsible for over half of the world’s nickel production, is actively expanding its local refining industry amid falling nickel prices and constrained ore supplies.
Project and Financing Details
According to official statements, the loan was provided by several renowned financial institutions, including Bangkok Bank PCL $BBL.BK, PT Bank Permata $BNLI.JK, PT Bank Mandiri $BMRI.JK, PT Bank Negara Indonesia $BBNI.JK, and PT Bank Rakyat Indonesia $BBRI.JK. The credit is arranged on a seven-year term without recourse, with PT Sulawesi Nickel Cobalt acting as the borrower. The funds will finance the construction of an acid leaching plant operating under high pressure at the Morowali Industrial Park in Indonesia.
The project will be executed under the guidance of Zhejiang Huayou Cobalt Co. $603799.SS, a publicly traded subsidiary of a major Chinese conglomerate, which will oversee the plant’s implementation. With an overall investment of approximately USD 1.8 billion, construction is scheduled to be completed within 18 months starting from January. Once operational, the facility is projected to achieve an annual capacity of 90,000 tonnes, significantly contributing to the supply chain for electric vehicle battery chemicals.
Project Phases
Securing the guaranteed financing from leading regional banks;
Planning and design of the HPAL plant;
Commencing construction and implementing strict project control measures;
Completing construction and initiating production.
Strategic Financial Considerations
The secured financing from reputable financial institutions underlines the project’s strong financial foundation;
Strategic allocation of investment funds in response to fluctuating raw material prices;
Mitigating market volatility by expanding Indonesia’s domestic refining capabilities;
Enhancing the overall value chain from raw material extraction to the production of battery chemicals.
The secured USD 1.4 billion loan and strategic partnerships with prominent financial institutions highlight the rigor behind the HPAL plant project. This initiative reinforces confidence in Indonesia’s evolving industrial landscape and underscores its long-term vision for a more integrated, domestically controlled raw materials supply chain that will support both local and international manufacturing sectors.
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