A joint venture between Lygend and Indonesia's Harita Group which is building a high-pressure acid leach (HPAL) project on Obi island will supply Easpring with 5,400-18,630 tonnes per year of nickel raw materials,on a metal content basis, from 2021, Easpring said in a stock exchange filing on Thursday.

The smelter is one of several Indonesian projects being watched by a global market hungry for timely supply of nickel and cobalt chemicals used in electric-vehicle batteries as demand rises.

The procurement agreement envisages annual supply of cobalt byproducts of 675-2,289 tonnes on a metal content basis, the filing said, adding Easpring would source nickel sulphate, cobalt sulphate and nickel hydroxide intermediates.

The deal is the second long-term customer win for Lygend and Harita in six months after China's GEM Co, which is building its own HPAL smelter in Indonesia, said in September it would buy nickel and cobalt sulphate from the Obi project, also over an eight-year period.

A Lygend official said in November that the company's HPAL project was scheduled to start up in March this year - six months later than previously planned after coronavirus restrictions slowed work.

Over the full eight years of the Easpring contract, the Lygend HPAL project will supply 43,200-149,040 tonnes of nickel raw materials and 5,400-18,312 tonnes of cobalt byproducts, the filing said.

(Reporting by Tom Daly; editing by Jason Neely)

By Tom Daly