On Monday, French mega-miner, Eramet, announced its decision to withdraw from a joint venture with Germany’s BASF. The venture, valued at US$2.6B, was aimed at developing a nickel-cobalt refining complex in Indonesia.
In January, Indonesian authorities had indicated that the French group and BASF were on the verge of finalizing the US$2.6B investment for nickel production for electric vehicle (EV) batteries. The project was to be based on resources sourced from Eramet’s mine in Weda Bay. At that time, Eramet confirmed that negotiations were in progress but emphasized that the project was contingent on a final investment decision.
Since then, Eramet has stated in a press release that the decision to abandon the JV was made after comprehensive assessments and strategic discussions about the project’s execution. Eramet also mentioned its ongoing commitment to explore other investment opportunities within Indonesia’s nickel EV battery sector, promising to keep stakeholders updated.
“After a thorough evaluation, we have concluded that we will not execute the nickel-cobalt refining project in Weda Bay. Since the inception of the project, the global nickel market has changed significantly. In particular, the supply options have evolved and with that BASF’s availability of battery grade nickel. Consequently, BASF no longer sees the need to make such a substantial investment to ensure a resilient metals supply for its battery materials business,” explained Anup Kothari, member of the board of executive directors of BASF SE. The company will stop all ongoing evaluation and negotiation activities for the project in Weda Bay.”
Eramet and BASF’s collaborative initiative was designed to leverage Indonesia’s abundant mineral resources, making it a strategic investment for both entities. However, logistical issues, potential regulatory obstacles, and shifting market trends likely contributed to the project’s suspension.
The outcome of the JV means Eramet and BASF will need to reassess their strategies to secure crucial materials for the burgeoning EV market, which could potentially impact their competitive advantage in this high-demand industry.
The termination underscores the growing concerns circulating Indonesian nickel, particularly in the wake looming international ESG demands faced by miners.
