China’s Shenzhen Chengxin Lithium Group Co Ltd and an affiliate of steel and nickel giant Tsingshan Holding Group will invest in a US$350 million Indonesian lithium project to capture demand from the electric vehicle (EV) battery sector.
The partners will build a plant to make lithium chemicals in Indonesia Morowali Industrial Park in Sulawesi, home to several Chinese-invested projects, including those making nickel and cobalt - metals used in battery-making.
Chengxin, in a filing to the Shenzhen Stock Exchange on Thursday, said it would own 65 percent of a joint venture - called PT ChengTok Lithium Indonesia - and Singapore-incorporated Stellar Investment Pte would hold 35 percent.
A Chengxin investor relations officer on Friday said Stellar is an affiliate of Tsingshan.
Tsingshan did not respond to a request for comment.
The Indonesian project will produce 50,000 tons a year of lithium hydroxide and 10,000 tons a year of lithium carbonate, Chengxin said in its filing, without specifying the source of raw materials.
Indonesia is the world’s biggest nickel miner but banned exports of nickel ore from the start of 2020 as it sought to process more of its resources at home and set up a complete EV battery supply chain in the country.
Last week, South Korea’s LG Energy Solution and Hyundai Motor Group started construction of a $1.1 billion plant to make EV batteries in Indonesia’s West Java province.
“This investment will greatly expand the company’s lithium salt business production capacity,” Chengxin said.
“After the project is put into operation, it will significantly increase the company’s revenue and profitability,” it said, without providing a projected start-up date.
In a separate filing on Thursday, Chengxin flagged another overseas move, saying its Hong Kong subsidiary had agreed to buy Argentinian miner Salta Exploraciones SA for $37.7 million.