Eramet and BASF will cancel their planned nickel and cobalt refining complex in Weda Bay, Indonesia.

According to French miner Eramet, discussions about the project's execution strategy and evaluation plans had been under consideration since the beginning of 2023 but both parties decided against the investment owing to prevailing nickel market conditions. In addition, BASF’s Board of Executive Directors member, Anup Kothari, told reporters that, since the initial announcement of the project, the company’s supply options have evolved, and BASF now has substantial battery-grade nickel available.

The companies entered a partnership to develop the refinery in 2020, and an investment of US$2.6Bn to build the refinery was announced in January 2023. The plant had planned to process ore supplied from Eramet’s mine in Weda Bay to produce mixed hydroxide precipitate (MHP) using high-pressure acid leach (HPAL) processing. Its designed production capacity was 60ktpy Ni- and 7.5ktpy Co-in-MHP and was touted to commence production in 2026.

Despite the financial setback, Eramet will proceed to evaluate other investment opportunities in Indonesia’s nickel sector for EV batteries and intends to keep stakeholders informed about any progress. Meanwhile, BASF will discontinue all plans associated with the Weda Bay refining complex but still pursue securing other sources of battery raw materials to produce precursor cathode active materials (pCAM), which may still include feedstock from Indonesia.

The Sonic Bay refinery would have represented the only investment in Indonesia involving 100% Western interests. However, other Western companies, including Nickel Industries, and Ford are still constructing HPAL plants in the country, with joint investment from Chinese interests. The abandoning of this development takes the number of HPAL projects planned in Indonesia, tracked by Project Blue to 21 (excluding multiple phases).