According to a report by the Nihon Keizai Shimbun on November 22, Japan ’s Sumitomo Metal Mine revealed on November 20 that it will invest more than 200 billion yen in Indonesia to build a nickel ore smelter. As a lithium-ion battery material, demand for rare metal nickel is currently strong, but there are difficulties in stable procurement. In Southeast Asia where nickel-producing nations gather, Chinese companies are also expanding their investments, and Sumitomo Metal Mine will expand the local system that can produce high-quality materials in one train.
The smelter is located in Pomalaa, southeast of Sulawesi, Indonesia. It will use nickel ore produced in the country to produce intermediate raw materials for lithium-ion batteries with an annual output target of 40,000 tons. A commercialization investigation has been initiated and detailed plans will be finalized after 2019. The exact time when the smelter was put into operation was not disclosed.
Nickel is an indispensable main raw material for the "positive material" of lithium ion batteries. Due to the expansion of the pure electric vehicle market, global demand for nickel is increasing. The new smelter will use nickel ore to produce intermediate raw materials, which will then be shipped to Japan. Subsequently, it produced battery anode materials at its domestic plant in Sumitomo Metal Mine and supplied them to battery manufacturers such as Panasonic.
Sumitomo Metal Mine has proposed a plan that by the end of 2018, the production capacity of cathode materials will be increased by 30% from the current level to a monthly output of 4,550 tons. With the construction of the smelter and the Philippines, which already has a base, the supply capacity of nickel intermediate raw materials at Sumitomo Metal Mine will increase. In addition, with the increase in supply locations, cost competitiveness can be improved.
Nickel is a rare metal and its production is concentrated in Southeast Asia such as Indonesia. In Southeast Asia, Chinese companies are also promoting capital contributions to local companies, but few companies are fully involved in the entire process from raw material procurement to processing.
Among Japanese companies, only Sumitomo Metal Mining is smelting nickel in Southeast Asia and other overseas regions. Its strengths are the ability to produce high-quality intermediate products even with low-grade nickel ore.
Focusing on the growing demand for pure electric vehicles and semiconductor materials, various non-ferrous metal companies in Japan are increasing investment. JX Metals and others have decided to invest 147 billion yen to increase production in copper mines in Chile. Mitsubishi Materials has also invested in copper mine development companies in Peru. All enterprises are starting to expand production.