(Yicai Global) Sept. 7 -- Zhejiang Weiming Environment Protection is joining forces with GEM, one of China’s biggest suppliers of battery raw materials, to build a laterite nickel smelting factory in Indonesia, which will be the second for each of them, as the Chinese solid waste disposal company expands its footprint in the battery materials sector.

Costing USD448 million, the new facility will be run by a joint venture between Weiming, Shenzhen-based GEM and investment firm Merit International Capital, Weiming said yesterday. Weiming will hold a 51 percent stake, GEM 23 percent and Merit 26 percent.

The plant, to be located in the Weda Bay Industrial Park on Indonesia’s Halmahera island, will produce high nickel matte and the amount of nickel in the products will tally 50,000 tons a year, it said. High nickel matte is an intermediate product of nickel ore smelting and can be further processed into high-purity nickel sulfate which is a key raw material needed for ternary lithium battery cathode materials.

The three investors shall have priority purchase rights of the nickel products produced by the JV in accordance with their shareholding ratios, the Wenzhou, southeastern Zhejiang province-based company said. The new facility should be ready in two years’ time, pending regulatory approval.

This is the waste handler’s second nickel project in Indonesia as it strives to meet booming demand for the raw materials used in electric car batteries. In January, Weiming linked arms with Hong Kong-based Merit International to build a USD390 million smelting facility on the Indonesian island with an output of 40,000 tons of nickel metal elements a year including high nickel matte.

And it is the third to be announced this year. In April, Weiming said it will build a factory in its home base of Wenzhou with an annual output of 200,000 tons of high nickel content ternary cathode materials together with nickel giant Tsingshan Holdings, also headquartered in Wenzhou, and non-ferrous metal miner Shengtun Mining.

GEM already co-owns a JV in Indonesia that it runs with EcoPro, a leading South Korean supplier of cathode materials for ternary lithium batteries, Tsingshan and battery giant Contemporary Amperex Technology that produces nickel, cobalt and manganese compounds for lithium batteries. Its planned annual capacity of battery-grade nickel sulfate is 150,000 tons. But the project has yet to come online.

Weiming’s share price [SHA:603568] closed up 0.2 percent at CNY26.27 (USD3.77), while GEM’s stock [SHE:002340] gained 1.8 percent to finish the day at CNY8.64.

Editor: Kim Taylor