(Yicai Global) May 24 -- Shares of Huayou Cobalt and Eve Energy rose after the two Chinese firms agreed to join a group of investors to build a USD2.1 billion nickel processing plant in Indonesia to secure their supply of battery raw materials.

Huayou's stock price [SHA:603799] surged as much as 5 percent to CNY95.45 (USD14.80) intraday.

Shares of Eve Energy [SHE:300014] climbed as much as 3.2 percent to CNY104 (USD16.20).

The pair and three other investors, including Yongrui Holdings, will form a joint venture to process laterite nickel ores on the island of Halmahera, the two said in separate statements today.

The cooperation should provide Huayou's new energy vehicle battery materials business with reliable resources, it said.

Eve Energy said that the project should mitigate the risks of commodity price fluctuations.

The plant should produce about 120,000 tons of nickel, and 15,000 tons of cobalt each year, raw materials of ternary lithium batteries.

Yongrui will be the JV's biggest shareholder with its 31 percent stake. Singapore-registered Glaucous International will be No. 2 with its 30-percent ownership. Huayou's unit will hold 20 percent of the equity and Eve Energy's subsidiary will have 17 percent. Moreover, Singapore-registered Lindo Investment will hold 2 percent. Sales will be divided correspondingly.

Yongrui will help the JV secure land and raw materials as its affiliates already have operations on the island.

Editor: Emmi Laine, Xiao Yi