Danantara Indonesia, sovereign wealth fund, and GEM, battery materials producer, with Vale Indonesia, nickel miner, have agreed that Danantara will invest in a $1.4 billion high-pressure acid leach (HPAL) facility in Central Sulawesi that will produce about 66,000 tons a year of mixed hydroxide precipitate (MHP) using ore from Vale’s mines. The move advances Indonesia’s push to deepen EV-supply-chain processing onshore and adds a new institutional investor alongside industrial sponsors.
Project Scope and Offtake Positioning
The Vale–GEM HPAL plant is designed as a MHP producer aimed at cathode precursor supply chains. GEM and Vale have been building a portfolio of Indonesian processing projects; the Central Sulawesi facility extends that platform and is framed as part of a broader “green industrial estate” concept tied to net-zero goals. Danantara’s backing signals state support for the midstream, where Indonesia seeks to lock in more value beyond nickel ore and ferronickel.
Financing and Policy Context
Danantara is raising 50 trillion rupiah [$3.06 billion] via low-coupon “Patriot Bonds” marketed to Indonesian corporates, complementing a $10 billion syndicated credit line and dividend inflows from state firms. The bond proceeds are earmarked for strategic projects, and officials have highlighted nickel processing among priority uses. Danantara has also signed with domestic partners on chemicals capacity and signaled room for co-investment with foreign sovereign funds.
Why Central Sulawesi—and Why MHP
Indonesia banned raw nickel-ore exports to catalyze downstream investment, a policy that has driven a wave of HPAL builds targeting MHP for lithium-ion batteries. Central Sulawesi has emerged as a focal province with integrated industrial parks, port access, and proximity to ore from Vale’s Sulawesi operations. MHP provides a flexible intermediate that can flow to nickel sulfate for NCM and other cathode chemistries, diversifying routes away from China-centric supply chains as buyers seek jurisdictional spread.
Company Background and Market Context
Danantara, launched in February 2025 and led by CEO Rosan Roeslani and CIO Pandu Patria Sjahrir, pools state assets and raises third-party capital to invest across energy transition, manufacturing and infrastructure. GEM is a major recycler and battery materials group with existing Indonesian partnerships, while Vale Indonesia is expanding a suite of mines and HPAL projects with global partners. Their collaboration on the $1.4 billion HPAL plant fits a broader push that includes additional projects and potential co-development with Korean and local firms.
Nickel is pivotal for stainless steel and certain EV battery chemistries; MHP has become the preferred intermediate for battery-grade supply chains. Prices on the London Metal Exchange hovered around $15,100–$15,200 per tonne in late August, reflecting an oversupplied market dominated by Indonesian growth even as buyers prize non-Chinese, low-carbon sources for long-term contracts.
