(Repeats earlier story for wider readership with no change totext.)
By Fergus Jensen
JAKARTA, Sept 14 (Reuters) - Several global metals producershave set their sights on Indonesia's nickel reserves to tap anexpected surge in demand for the metal for electric vehiclebatteries.
Sumitomo Metal Mining Co Ltd (SMM) said on Thursdaythat it and nickel miner PT Vale Indonesia areconducting a feasibility study to build a nickel processingproject in Pomalaa, Southeast Sulawesi. A spokesman for Vale said the plant would make anintermediate nickel and cobalt product that would then beprocessed into nickel sulphate for batteries.
Major nickel producers are taking a closer look at Indonesiawhose large nickel laterite ore reserves are already prized fornickel pig iron used in stainless steel production.
Indonesia's nickel ore has largely been overlooked bybattery producers, as extracting the high purity nickel theyneed from it requires plants that are more costly and difficultto operate than conventional nickel smelters.
That could change if producers are willing to ploughinvestments into high pressure acid leach (HPAL) plants. Theplants, which use heat and pressure to remove the nickel andcobalt from the ore, are regarded as technically challenging andexpensive but produce high quality metal.
Xiao Fu, Head of Commodity Market Strategy at BOCInternational, said on the sidelines of Asian Nickel conferencethis week that the EV market "could represent growthopportunities in Indonesia" and attract interest from Chinesebattery makers.
"In Asia, everyone is racing toward this new game," sheadded, referring to developing projects by , which isdeveloping a huge nickel sulphate plant Western Australia, andby China's Jinchuan Group . "Indonesia's strength is in nickel ore, and nickel pig iron,but there could be a shift if this is where the opportunitiesare," Xiao said.
Vale Indonesia is working on obtaining environmental permitsfor the proposed 40,000-tonne smelter which will process oreextracted using high-pressure acid leaching (HPAL), BusinessDevelopment Manager Steve Brown said on the sidelines of theconference.
HPAL technology is "still emerging" in Indonesia, saidBrown, noting that early entrants willing to invest in the moretechnically challenging field could be well rewarded.
Brazil-based Vale is the world's biggest nickel producer.Chinese stainless steel-maker Tsingshan Holding Group,Indonesia's biggest nickel producer, is leading a group seekinginvestors for a nickel sulphate plant to produce EV batteries ina $10 billion industrial park linked to its Weda Bay concession,the group said last month.
The group, which also includes China's Huayou Cobalt Ltd andZhenshi Holding Group, is looking to develop 9.3 million tonnesof nickel reserves in Weda Bay, in Malaku, jointly owned byFrance's Eramet.
A China-based spokesman for Tsingshan deferred questions toits subsidiary Shanghai Decent Investment Group, which declinedto comment.
Huayou's board secretary did not immediately respond to arequest for comment.
Liu Cheng, chief engineer and vice president of the ChinaENFI Engineering Corp, said his company is conducting studiesfor four Indonesian projects using HPAL to produce nickel forbatteries.
Liu declined to name the companies involved because ofnon-disclosure agreements, but said the process could use nickelores high in cobalt that is often discarded by Indonesia'snickel pig iron industry.
Akira Nozaki, president of Sumitomo Metal Mining, said thefeasibility study for the Pomalaa project would "probably" takeup to two years.
SMM would like to take a majority stake in the project if ituses HPAL technology, Nozaki told Reuters. (Reporting by Fergus Jensen in JAKARTA; Additional reporting byYuka Obayashi in TOKYO and TOM DALY in BEIJING; Editing byChristian Schmolinger)
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