Chinese battery firm GEM is reportedly partnering with four companies to set up a joint venture (JV) to produce battery-grade nickel chemicals in Indonesia, with a total investment of around $700m.

The partners in the project include divisions of Chinese lithium battery manufacturer Contemporary Amperex Technology (CATL) and stainless steel-maker Tsingshan Holding Group, as well as Japan’s Hanwa and Indonesia’s nickel ore miner PT Bintangdelapan Group, Reuters reported.

The development comes at a time when several global metals companies aim to capitalise on the growing demand from car manufacturers for the battery metal.

GEM and its partners intend to set up a nickel smelting plant with an annual capacity of at least 50,000t at nickel producer Tsingshan’s industrial park in Morowali on the Indonesian island of Sulawesi.

The facility will also have cobalt smelting capacity of 4,000t and is expected to produce battery chemicals, including 50,000t per year of nickel hydroxide intermediates.

GEM, which will hold a 36% interest in the project through its subsidiary Jingmen GEM, was quoted by the news agency as saying: “In the future, the product structure will be adjusted according to the global market demand and the production scale will be expanded.”

The project will procure nickel ore from Tsingshan and process it to make the chemicals. Tsingshan’s Hong Kong-based subsidiary will own 21% of the project.

“In the future, the product structure will be adjusted and the production scale will be expanded.”

Remaining interest will be held by CATL’s recycling division Brunp (25%), Hanwa (8%) and Indonesia Morowali Industrial Park (IMIP) (10%). IMIP is a joint venture entity formed by Bintangdelapan and Tsingshan.

In March this year, GEM entered into a transaction to purchase around 33% of Glencore’s cobalt production over the next three years.

Last week, the company began construction of a 70,000t per year of battery materials plant under a JV with Tsingshan. The plant is located in southeastern China’s Fujian province and involves initial investment of CNY1.85bn ($268.72m).