SK On signed a business agreement with EcoPro, a secondary cell battery materials company, and Green Eco Manufacture (hereinafter GEM), a Chinese battery precursors producer, to establish a corporation for nickel intermediates production in Indonesia.

Vice President of EcoPro Park Sang-wook, GEM Vice-Minister Jiang Miao, and SK On Head of Battery Procurement Division Shin Young-kee attended the opening ceremony.

Under the agreement, the three companies will build a “Ni Mixed Hydroxide Precipitate (hereinafter MHP)” production plant in the Morowali Industrial Complex in Sulawesi, Indonesia, and produce MHP amounting to 30,000 tons of pure nickel per year starting the third quarter of 2024. The production amount is equivalent to 43 GWh of the EV battery, which is enough to produce 600,000 EVs. The three companies plan to expand cooperation in raw materials such as battery precursors and nickel. 

They also plan to secure nickel oxide at the Hengjaya mine in Sulawesi. Since nickel oxide can be mined in the open air, the mining process is less expensive, and cobalt can be obtained as by-products.

In addition, the three companies will introduce High-Pressure Acid Leaching (HPAL) smelting process to produce the MHP from nickel oxide minerals. The three companies are also considering producing nickel sulfate, and battery precursors in Korea based on the MHP secured through this occasion. If SK On procures the nickel sulfate from South Korea (an FTA partner with the U.S.) and puts it into the EV battery production process in the U.S., it may meet the IRA electric vehicle subsidies requirements.

Along with lithium and cobalt, nickel is considered an essential raw material for EV batteries.

SK On has strengthened its supply chain for core battery materials such as lithium and cobalt. This month, it signed a long-term lithium supply contract with Chile’s SQM, a leading lithium company, and agreed to supply 57,000 tons over five years starting in 2023. Last month, SK On invested a 10% stake in Lake Resources in Australia and signed a mid-to-long-term contract to be supplied 230,000 tons of lithium over ten years starting the fourth quarter of 2024.

In addition, the battery business has cooperated with several companies for raw materials, such as Global Lithium Resources (Australia), Glencore (Switzerland), and POSCO Holdings.

“The cooperation between the three companies is significant in that they established a global nickel supply chain,” said Shin Young-kee, Head of Battery Procurement Division at SK On. “SK On plans to further strengthen its raw material supply chain by cooperating with different raw material companies.”

“We decided on the joint venture after close discussions with SK On and GEM at a time when the supply and demand of global nickel remained uncertain in the mid-to-long-term,” said Park Sang-wook, Vice President of EcoPro. “This business agreement is even more meaningful because it is based on trust among the three companies.”