Battery Materials Firm GEM In Indonesian JV To Diversify Risk, Protect US, EU Markets

Highlights :

  • The move marks yet another case of a Chinese firm moving to protect its high market share by aligning with partners in other countries, especially south east asia.
Battery Materials Firm GEM In Indonesian JV To Diversify Risk, Protect US, EU Markets Battery Materials Firm GEM In Indonesian JV To Diversify Risk, Protect US, EU Markets

Shenzhen, China based GEM, the largest supplier of battery raw materials in China and the leading battery recycling firm in China and globally, has announced plans to  invest about USD750 million in two new plants in Indonesia in a move aimed at diversifying its manufacturing base and developing global industrial supply chains in alignment with the provisions of the US Inflation Reduction Act. Or more simply, to avoid any US sanctions on China-based sourcing of battery materials. The move, with majority ownership resting with the local partner, is meant to work around conditions linked to source as well as ownership that might come with future moves in the US, vis a vis China.

The first plant, with a total investment of USD600 million, will be built in the PT Indonesia Morowali Industrial Park and will process laterite nickel ore into compounds with a nickel content of 30,000 tons annually, according to GEM. The plant will be built in two phases, with the first going into operation next year and the second by the end of 2025.

The project will be majority owned by local Indonesian firm PT Merdeka Battery Materials, that will also be responsible for the supply of nickel ores for the JV, while two units of GEM will own the rest. Indonesia is a leading source of nickel, and the government has moved in recent months to seek more value addition before the metal is exported out to other countries.

GEM’s lithium battery materials JV plant in South Korea will get first rights to buy 80 percent of the output from the Indonesian laterite nickel ore plant, where it will be further processed to make battery ternary precursor material. Most of the output is meant to serve demand in the US and European markets.

GEM said in March that it had agreed with South Korean power battery maker SK On and lithium battery cathode precursor maker EcoPro Materials to invest USD931 million together building a local plant to turn out cathode precursors and raw materials for European and US clients and meet the IRA’s provisions.

Over the past 20 years, GEM started with recycling nickel-cobalt resources and mobile phone batteries, moving on to include waste electronics and electrical equipment (E-waste), end-of-life vehicles, and power batteries (such as those used in Electric Vehicles (EVs). GEM then entered the world of re-manufacturing power batteries and power battery materials.


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