Posco Holdings, Lygend Resources sign nickel deal

Industry

Published: 24 Feb. 2023, 16:37 Updated: 24 Feb. 2023, 18:27

Posco Holdings, Lygend Resources sign nickel deal

Lee Kyung-sub, left, head of battery materials business at Posco Holdings, and Jiang Xinfang, CEO of Lygend Resources & Technology, take a photo after signing an agreement in Jakarta, Indonesia, on Feb. 23. [POSCO HOLDINGS]

Posco Holdings inked an agreement with China’s Lygend Resources & Technology to build a nickel intermediate plant in Indonesia.

Under the non-binding memorandum of agreement, the two will establish a factory on the island of Sulawesi in Indonesia to produce mixed hydroxide precipitate (MHP), a nickel and cobalt-containing intermediate product to make nickel sulfates.

Nickel sulfates are the key raw ingredient in making cathodes, the material that accounts for 40 percent of battery costs.

The facility will have 60,000 tons of production capacity, enough to make 1.2 million EVs, with plans to later expand capacity to 120,000 tons.

Ground will be broken within the year, with production beginning in 2025.

The size of the investment was not confirmed.

Indonesia has the world's biggest reserves of nickel, essential in making batteries. The country has an estimated 21 million tons of nickel.

Lygend Resources has unique technology in refining nickel and was the first company in Indonesia to have a nickel-refining facility.

"The latest cooperation with Lygend Resources, the leading company in terms of refining nickel, Posco Holdings will be able to secure price-competitive Indonesian nickel to strengthen our material business," said Lee Kyung-sub, head of the battery materials business at Posco Holdings.

Posco Holdings in October broke ground on a nickel refining facility in Gwangyang, South Jeolla. The facility, with an annual production of 20,000 tons, will be completed in the second half.

It also purchased a 30 percent stake in the Ravensthorpe Nickel Operation in Australia.

The steel giant aims to produce 200,000 tons of nickel and 300,000 tons of lithium by 2030.

BY SARAH CHEA [chea.sarah@joongang.co.kr]