Indonesia’s sovereign wealth fund Danantara and French mining company Eramet are in advanced discussions to acquire a stake in a high-pressure acid leach (HPAL) nickel plant located in the Weda Bay Industrial Park, North Maluku. The facility, majority owned by China’s Zhejiang Huayou Cobalt, produces battery-grade nickel essential for electric vehicles. If finalized, this would mark Danantara’s first major investment since its launch in February 2025, signaling a significant step in Indonesia’s strategy to capture more value from its vast nickel reserves and strengthen its role in the global battery supply chain. Danantara and Eramet are aiming to sign a memorandum of understanding by the end of May, though negotiations are ongoing and subject to change.
The Weda Bay HPAL plant, which processes around 3.4 million wet tonnes of ore annually and produces up to 72,000 tonnes of nickel per year, is a key supplier for the rapidly growing electric vehicle sector. About 42% of its output meets battery-grade specifications, and the facility also generates cobalt as a byproduct. Danantara would make its investment through Mining Industry Indonesia, a state-owned entity, leveraging the fund’s $20 billion in seed capital for strategic projects. This move aligns with Indonesia’s policy of resource nationalism and its efforts to encourage downstream processing rather than raw material exports.
For Eramet, which already operates one of Indonesia’s largest nickel mines in North Maluku, the deal would bolster its processing capabilities after its previous HPAL project with BASF was canceled in 2024. The partnership with Danantara could help Eramet secure a more stable position in Indonesia’s nickel value chain, especially as the country tightens regulations on foreign mining and seeks to ensure greater domestic ownership in strategic sectors. Eramet’s CEO has emphasized the potential for the partnership to drive innovation and support the development of Indonesia’s electric vehicle battery industry.
The Weda Bay Industrial Park has become a focal point for Indonesia’s nickel ambitions, hosting multiple processing facilities and contributing about 15% of global battery-grade nickel output. The park’s integrated infrastructure and proximity to major Asian battery manufacturing hubs make it an attractive location for further investment. The HPAL technology used at the plant enables the production of high-purity nickel sulfate, meeting the stringent requirements of EV battery manufacturers.
This potential partnership also reflects broader shifts in global battery supply chains, as Western companies seek to diversify away from Chinese-dominated processing. With the U.S.-Indonesia Critical Minerals Agreement granting Indonesian nickel tariff-free access to U.S. markets, the Danantara-Eramet deal could help supply European and American EV makers with battery materials that carry lower geopolitical risks.
While a final agreement has not yet been reached, the talks underscore Indonesia’s growing influence in the global nickel market and its determination to move up the value chain in battery materials.
