PT Vale Indonesia and China’s Zhejiang Huayou Cobalt have signed heads of agreement (HoA) to build a smelter with high-pressure acid leaching (HPAL) technology in Indonesia.

Planned to be built in Sorowako in South Sulawesi Province, the HPAL plant will be equipped to process nickel limonite ore into mixed hydroxide precipitate (MHP).

The project is estimated to cost $1.8bn, reported Reuters.

Under the heads of agreement, the plant will have a production capacity of around 60,000tpa of nickel in MHP, which can later be processed into battery material components.

In April 2022, Vale signed a deal with Huayou to build an HPAL plant in Pomalaa, south-east Sulawesi, to produce 120,000t of MHP. Later, US carmaker Ford Motor joined the partnership for the proposed plant.

PT Vale Indonesia CEO Febriany Eddy was quoted by Reuters as saying that the Pomalaa plant’s final investment decision (FID) is expected by the end of this year while the FID for the Sorowako plant is planned for next year.

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Vale chief financial officer Bernardus Irmanto said that the company will reserve the rights to acquire a stake in the Sorowako plant, which would be built by Huayou.

Vale Base Metals executive vice president and PT Vale president commissioner Deshnee Naidoo said: “This partnership agreement is another catalyst for sustainable economic development of Indonesia’s world-class nickel resources and together with recent progress on the Pomalaa HPAL facility and Bahodopi Block Project, shows we are committed to executing our next generation of sustainable growth projects with minimal environmental impacts for the benefit of local and national stakeholders.”

Huayou chairman Chen Xuehua said: “Our cooperation is a perfect combination of Vale’s mineral resource advantage and Huayou Cobalt’s advanced high-pressure acid leaching technology advantage, to achieve low-carbon, green and sustainable mineral resource development.”