JAKARTA (Reuters) - Germany's BASF and French miner Eramet are finalising a $2.6 billion partnership deal to invest in a facility in Indonesia to process nickel for use in batteries for electric vehicles, Indonesian officials said.
The Indonesian announcement comes as Southeast Asia's biggest economy has been courting global companies to build facilities to produce EV batteries and electric cars to exploit the country's rich nickel resources.
In separate emailed responses, the companies confirmed they were assessing a hydro-metallurgical project to produce battery-grade nickel and cobalt from Eramet's mine in Indonesia's Weda Bay, but did not confirm the proposed investment.
Indonesia's investment ministry cited BASF chief executive Martin Brudermüller as saying the project investment would be worth around 2.4 billion euros ($2.59 billion).
"We would like to convey that our agreement with Eramet is at the final stage. It is likely that our decision will be taken in the first half of 2023," the ministry quoted Brudermüller as saying.
Eramet said in a statement the project was subject to a final investment decision and further details would be disclosed if a decision was made.
BASF spokesman Paul Warkentin also said more details would be given once an assessment had been concluded.
The planned plant would produce mixed hydroxide precipitate (MHP) from nickel through a high-pressure acid leach (HPAL) plant. MHP is used in electric vehicle batteries.
Eramet said the plant could start production in early 2026 investment decision subject to a final investment decision, with an output capacity of up to 67,000 tonnes of nickel and 7,000 tonnes of cobalt contained in MHP per year.
BASF and Eramet's investment plan was in line with the government's "aspirations to set up Indonesia as world-class EV player," said Indonesian Investment Minister Bahlil Lahadalia.
Indonesia is also finalising agreements with Chinese automaker BYD Group and Tesla to invest in EV production facilities, a senior cabinet minister said on Tuesday.
Once the biggest supplier of nickel to the global stainless steel industry, nickel producers in Indonesia have been retooling so they can take advantage of the growing demand for nickel in batteries.
While overall battery demand for nickel makes up a small portion of the 3 million tonne market, Indonesia is primed to become the world's biggest supplier as it builds out some 4.5 million tonnes of capacity that can supply both markets over the next five years, analysts estimate.
Investment into MHP production in Indonesia has so far been dominated by Chinese companies such as Zhejiang Huayou Cobalt and Tsingshan Holding Group.
Separately, Australia's Nickel Industries said on Wednesday it will raise $471 million in capital to help fund the acquisition of several nickel projects in Indonesia.
To develop battery nickel, the company will also look to collaborate with Shanghai Decent Investment (Group) Co Ltd, a unit of the Tsingshan Group.
(This story has been refiled to correct the source to official company statement, and not spokeswoman, in paragraph 6)
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(Reporting by Bernadette Christina in Jakarta, Rishav Chatterjee in Bengaluru and Melanie Burton in Melbourne; Editing by Ed Davies)