SK on Co., a pure-play battery maker under South Korea’s SK Group, is building a nickel processing facility in Indonesia, world’s top nickel producer with largest reserves, together partners from home and China.

SK on announced Friday that it has signed a business agreement with Korean secondary battery materials firm EcoPro and Chinese precursor production firm Green Eco Manufacture (GEM) to establish a production entity for nickel intermediary goods. Under the agreement, the three companies will jointly build a nickel and cobalt Ni Mixed Hydroxide Precipitate (MHP) production factory in an industrial complex in Morowali in the Indonesian state of Sulawesi.

The factory will begin production of MHPs for 30,000 tons of pure nickel annually from the third quarter of 2024. The amount enables production of about 43 gigawatt (GWh) electric vehicle batteries which is enough to churn out 600,000 EV units.

SK on, EcoPro, and GEM also plans to secure nickel laterite ore from Hengjaya mine in the state of Sulawesi and introduce high-pressure acid leaching smelting processing to produce MHP with nickel laterite ore. High-pressure acid leaching smelting process involves leaching metal responding to sulfuric acid from nickel ore under high temperature and pressure. It allows production of nickel compound with higher purity.

MHPs are gaining traction as a major raw material of nickel sulfate used in battery-use precursor production as they are more stable and affordable compared with other intermediary goods.

The three companies are considering producing precursors and nickel sulfate in Korea based on the secured MHPs.

SK on is expected to meet U.S. Inflation Reduction Act requirement if it uses self-sourced nickel sulfates for EV production in the U.S. since Korea is under a free trade agreement with the United States.

“The team-up is significant in that we have secured a stable global nickel supply chain,” said Shin Young-ki who is in charge of purchase at SK on. “We plan to strengthen raw material supply network by working with various materials companies.”

The business agreement between the three companies come at a time when gobal nickel supply remains uncertain down the road, said Park Sang-wook, vice president at EcoPro.

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]