(Yicai Global) May 19 -- Chinese battery precursor maker CNGR Advanced Material and Singaporean financing solutions provider Rigqueza International are investing USD1.3 billion to construct three nickel processing plants in Indonesia, in addition to one that is already underway, that will produce high-grade nickel matte to meet soaring demand for the key raw material used in electric car batteries.

Each factory is expected to cost USD420 million and will produce 40,000 tons of high-grade nickel matte a year using local nickel laterites as raw material, Changsha, central Hunan province-based CNGR said yesterday. No construction schedule was given.

The facilities will be located in the Indonesia Weda Bay Industrial Park in North Maluku province. CNGR will hold a 70 percent stake in each through three separate Hong Kong units, and the remainder will be owned by Singapore-based Rigqueza.

This is the second partnership between the two parties. Last April, CNGR and Rigqueza said that they will construct a high-grade nickel matte plant with a yearly capacity of 30,000 tons in the Indonesia Morowali Industrial Park in central Sulawesi province with joint investment of USD243 million.

Some 62 percent of Indonesia’s nickel ore reserves are in Sulawesi Island and the surrounding islands. Rigquzea and its affiliates own 53,000 hectares of land in Sulawesi province which are rich in nickel ore resources, it said earlier.

High-grade nickel matte is a primary product of nickel concentrate smelting and a raw material used to produce high-purity nickel sulfate, which is the core ingredient of the nickel-cobalt-manganese ternary precursor for lithium batteries. Due to the high-energy storage density, lithium power packs with ternary precursors as the cathode material often have an advantage of strong endurance and durability.

CNGR, which counts US electric car startup Tesla and South Korean battery giants LG Chemical and Samsung SDI as clients, was on track to produce over 200,000 tons of ternary precursors last year and is expected to reach 500,000 tons by the end of next year, company executives said last September.

CNGR's share price [SHE:300919] closed down 0.93 percent at CNY106.83 (USD15.8)  today.

Editor: Kim Taylor