CNGR last month agreed to buy nickel matte - an intermediate product that can be processed into battery-grade nickel - from Tsingshan Holding Group. The surprise deal sent nickel prices plunging as the market sensed concerns of tight nickel supply could be overdone.
Now, Changsha-based CNGR is looking to produce matte itself in a $243 million smelting project in Tsingshan's industrial park on the Indonesian island of Sulawesi.
The project with Singapore-based Rigqueza International will produce 30,000 tonnes of nickel matte a year, CNGR said.
"Demand for ternary material nickel is accelerating," CNGR said in a filing to the Shenzhen Stock Exchange, noting a trend toward high-content nickel batteries with a longer lifespan.
CNGR will hold a 70% stake in the joint venture, to be called PT ZhongTsing New Energy, according to the filing, with Rigqueza holding the remaining 30%. Rigqueza is registered in Singapore but it was not immediately clear if the company is related to Tsingshan.
The first $81 million phase is set to produce 10,000 tonnes of matte on a nickel content basis, said the filing, which did not provide a targeted start-up date.
The venture is the latest in a number of Chinese-backed projects in top nickel miner Indonesia, which banned nickel ore exports from the start of 2020 as it sought to establish a fully integrated battery industry at home.
Chinese battery maker Contemporary Amperex Technology (CATL) plans to invest $5 billion in a lithium battery plant in the Southeast Asian country, Indonesian government officials have said.
(Reporting by Tom Daly; Editing by Susan Fenton)
By Tom Daly