Chinese mining firm Lygend has begun operations at its $1.05-billion nickel and cobalt smelting project in Indonesia.
The firm announced this week that the plant had made its first batch of mixed hydroxide precipitate (MHP), becoming the first high-pressure acid leach (HPAL) project in the country to reach production.
The site on Obi island is among several cobalt-nickel HPAL plants in the south-east Asian country now in the spotlight as they are a source for the burgeoning electric-vehicle battery sector.
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“Our first batch of nickel and cobalt hydroxide products will be shipped to China soon, and gradually enter the global market,” said Lygend’s president Jiang Xinfang.
Jiang said that Lygend Resources and its Indonesian partner Harita Group plan to build other projects on Obi island to make nickel sulphate, precursors and stainless steel-related products.
“It means that there is a viable path to produce battery grade nickel with a reasonably low capital cost and a relatively short project timeline,” said independent consultant Steven Brown.
‘PRICE DROP’
“With the nickel market already in surplus, we can expect the nickel price to drop if the commissioning process continues at this pace,” Brown added.
Lygend has been able to use Chinese contractor Enfi Engineering Corp, which has experience in HPAL in Papua New Guinea, to design its project and benefit from relatively low-cost labour and nickel ore costs in Indonesia.
The company aims to reach first-phase annual capacity of 30,000-37,000 tonnes of MHP in the second half of 2021.
LOW-COST
A flurry of HPAL projects, all involving Chinese companies, were announced a few years ago in Indonesia and raised eyebrows with their low cost estimates and short time frames.
The pandemic slowed their progress, with Lygend’s project delayed for nine months and only starting trial production last month.
Nickel’s three-month price on the London Metal Exchange fell 1.1% to $17,780 a tonne on Wednesday with research house Antaike forecasting an average nickel price in 2021 of $16,500 a tonne.
- Reporting by Reuters
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