SK On signs MOU with Chinese company for Indonesia nickel plant

SK On signed a memorandum of understanding with Kosdaq-listed EcoPro and Shenzhen-based and listed Green Eco-Manufacture to build a nickel intermediate plant in Indonesia.

Representatives from SK On, EcoPro, and Green Eco-Manufacture, including Shin Young-kee, center in the front, vice president in charge of procurement at SK On, pose for a photo after signing an agreement on Friday at SK On's headquarters in central Seoul. [SK ON]

SK On signed a memorandum of understanding with Kosdaq-listed EcoPro and Shenzhen-based and listed Green Eco-Manufacture to build a nickel intermediate plant in Indonesia.

Under the agreement, the three will establish a mixed hydroxide precipitate (MHP) factory on the island of Sulawesi in Indonesia, a nickel and cobalt-containing intermediate product to make nickel sulfates.

Nickel sulfates are the critical mineral needed to make precursors, a major ingredient in cathodes. They account for 70 percent of the cost of cathodes, SK On said.

Specific details of the investment will be discussed later, the battery maker said.

The three companies will also build a high-pressure acid leach (HPAL) facility. It will extract nickel and cobalt from laterite ore. The companies will source nickel laterite ores from the Hengjaya mine in Sulawesi.

The HPAL process utilizes elevated temperatures, at roughly 255 degrees Celsius, and elevated pressures to separate nickel and cobalt from the laterite ore. Green Eco Manufacture will supply the HPAL technology.

The factory is expected to start operation in the third quarter of 2024. The materials will be used in making 600,000 EVs per year.

The MHP will later be shipped to Korea to make nickel sulfates and precursors.

"The cooperation among three companies is meaningful that we have secured a stable supply of nickel," said Shin Young-kee, vice president in charge of procurement at SK On, "SK On will constantly expand our cooperation with global material companies to strengthen the supply chain."

Indonesia has the world's biggest reserves of nickel, which is essential in making batteries. It is estimated that the country has 21 million tons of nickel.

BY SARAH CHEA [chea.sarah@joongang.co.kr]