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Zhejiang Huayou digs deeper into EV battery business

The company, which also has extensive interests in Africa, partners with Hubei-based EVE Energy and others in a $2.1 billion joint venture in Indonesia

Tesla has signed a deal to buy nickel worth about $5bn, Indonesia said on Monday.
Nickel mining in Indonesia. The country sought a nickel supply deal with makers of electric vehicles such as Tesla to secure its mining production. File photo: Reuters.

(AF) China’s Zhejiang Huayou Cobalt plans to deepen its involvement with electric vehicle (EV) batteries with a massive nickel and cobalt project in Indonesia.

The company, which also has extensive interests in Africa, said on Monday it would partner with Hubei-based EVE Energy and others in a $2.08 billion joint venture.

The company would also spend $210 million on a stake in Chinese battery materials producer Tianjin B&M Science and Technology Co as it makes investments across the rechargeable battery supply chain.

Huayou will hold 20% of the Indonesian venture, which is the cobalt producer’s third battery nickel smelting project in Indonesia, which is becoming an important centre for battery chemicals.

“We see Huayou as one of the best-hedged plays for investors seeking exposure to the midstream-to-upstream segment of the booming battery sector, and as a chief beneficiary of the battery/EV materials upcycle,” Dennis Ip, equity analyst at Daiwa Capital Markets in Hong Kong, said.

Huayou Cobalt is one of the largest cobalt refiners in the world. The new smelter will be built at Weda Bay on Halmahera Island in the east of the archipelago, where Huayou already partners Tsingshan Holding Group in a nickel sulphate project.


It aims to produce 120,000 tonnes of nickel and 15,000 tonnes of cobalt annually, Huayou said in a Shanghai Stock Exchange filing.

EVE will have a 17% stake, while the other partners are Yongrui Holdings with 31%, Glaucous International with 30% and Lindo Investment with 2%.

“Huayou has also expanded both horizontally and vertically over the past few years to become an integrated producer of most components across the lithium-ion battery cathode value chain,” Ip noted.

Yongrui is wholly-owned by Yongqing Technology Co, a subsidiary of Tsinghan, the biggest nickel producer in Indonesia and the world’s top stainless steel maker.

“While Huayou is only holding a 20% stake in the project, we would like to highlight that this project is massive in size,” Ip said.

The company will also be part of a consortium led by South Korea’s LG building a $1.2 billion battery plant near Jakarta, Indonesia’s investment minister said on Monday.

With reporting by Reuters


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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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