EcoPro expands nickel supply with new GEM deal

EcoPro CEO Song Ho-jun, left, and Green Eco-Manufacture (GEM) Chairman Xu Kaihua sign an investment deal at GEM's nickel processing facility in Indonesia last week. [ECOPRO]

EcoPro agreed to invest a total of $86 million into a nickel processing facility in Indonesia, operated by China’s Green Eco-Manufacture (GEM), to expand its nickel supply chain.

This is EcoPro’s second phase of investment made in the Indonesian plant QMB, which is situated at the industrial complex on Sulawesi island. The company has not disclosed exact figures for either phase, but did state on Wednesday that the additional investment will increase the amount of nickel that it receives from QMB.

The company secured a 9 percent stake in the Indonesian production plant, as well as an annual provision of 6,000 tons of nickel, with its initial round of funding, which took place in March 2022.

“We cannot reveal the investment figure due to confidential agreement that was part of the deal,” an EcoPro spokesperson said. “The amount of stake stays the same. The recent deal was made to secure a larger nickel supply.”

The second deal will equip QMB with the infrastructure to annually produce 50,000 tons of nickel annually. It can currently produce 30,000 tons.

EcoPro imported its first 400 tons of nickel from QMB through Pohang in August.

Nickel is a key material in the production of secondary batteries. Indonesia has the world’s largest nickel reserves; they are estimated at 21 million tons, and account for 22 percent globally.

EcoPro CEO Song Ho-jun and GEM Chairman Xu Kaihua met at the Indonesian facility last week to sign the deal.

EcoPro will use the QMB-supplied nickel to make battery precursor, which it will then supply to affiliates such as EcoPro BM and EcoPro EM.

“Through investment in QMB, supply value chain for the raw material to process precursor was strengthened,” EcoPro CEO Song Ho-jun said in a statement. “EcoPro, as the EcoPro Group’s holding company, will focus on securing stable supplies to make our business more lucrative.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]