SEVERAL global metals producers have set their sights on Indonesia’s nickel reserves to tap an expected surge in demand for the metal for electric vehicle batteries.

Sumitomo Metal Mining Co. (SMM) said that it and nickel miner PT Vale Indonesia are conducting a feasibility study to build a nickel processing project in Pomalaa, Southeast Sulawesi.

A spokesman for Vale said the plant would make an intermediate nickel and cobalt product that would then be processed into nickel sulphate for batteries.

Major nickel producers are taking a closer look at Indonesia whose large nickel laterite ore reserves are already prized for nickel pig iron used in stainless steel production.

Indonesia’s nickel ore has largely been overlooked by battery producers, as extracting the high purity nickel they need from it requires plants that are more costly and difficult to operate than conventional nickel smelters.

That could change if producers are willing to plough investments into high pressure acid leach (HPAL) plants. The plants, which use heat and pressure to remove the nickel and cobalt from the ore, are regarded as technically challenging and expensive but produce high quality metal.

Xiao Fu, head of Commodity Market Strategy at BOC International, said last week that the EV market “could represent growth opportunities in Indonesia” and attract interest from Chinese battery makers.

“In Asia, everyone is racing toward this new game,” she added, referring to developing projects by, which is developing a huge nickel sulphate plant Western Australia, and by China’s Jinchuan Group. (SD-Agencies)