Indonesian Nickel Producer to Invest $1.8 Billion in New Processing Plant

An Indonesian nickel producer has announced a $1.8 billion investment in the construction of a new nickel and cobalt processing plant, as the country seeks to enhance the value of its mineral production.

PT Merdeka Battery Materials confirmed this week that it has signed agreements to build the facility on the island of Sulawesi (Celebes). The plant will be constructed in the Morowali industrial park, one of Southeast Asia’s largest nickel production centers.

Indonesia, home to the world's largest nickel reserves, has traditionally had limited refining capacity. The government aims to change this by encouraging downstream investments in nickel processing.

The project will be financed by a $1.4 billion (EUR 1.33 billion) loan, with construction set to begin in January next year. The plant is expected to be completed within 18 months.

China continues to invest heavily in Indonesia's nickel industry, given the metal’s critical role in electric vehicle batteries and stainless steel production. However, nickel mining has been linked to deforestation and concerns from indigenous communities over land rights.

In 2023, labor disputes emerged in the Morowali industrial park, where hundreds of Indonesian workers protested against conditions at a Chinese-funded nickel processing plant following an explosion that killed 18 people.