PT Vale Indonesia Tbk and China’s Zhejiang Huayou Cobalt Co. announced an agreement with Ford Motor Co., creating a three-party collaboration to advance more sustainable nickel production in Indonesia and help make electric vehicle batteries more affordable.

All three companies are making equity investments in the Pomalaa Block High-Pressure Acid Leaching (HPAL) Project through a definitive agreement. The Pomalaa Block HPAL Project will process ore provided by PT Vale Indonesia from its Pomalaa Block mine to produce MHP. This HPAL plant will operate under PT Kolaka Nickel Indonesia in the Pomalaa Block nickel industrial area in Kolaka, Southwest Sulawesi, Indonesia.

Subject to regulatory approval, the project could produce up to 120 kilotons per year of contained nickel in the form of mixed hydroxide precipitate (MHP), a lower-cost nickel product used in EV batteries with nickel-rich cathodes.

Pomalaa Block HPAL Project early site preparations have already started, and full construction is expected to start this year, with commercial operations beginning in 2026. The collaboration will deliver materials essential for the auto industry’s shift to EVs, enhance Indonesia’s EV manufacturing industry and support Ford’s plan to deliver a two-million EV production run rate by the end of 2026 and further scale over time.

The three-way nickel processing project—together with a separate supply agreement under development with Ford and Huayou for a precursor cathode active material critical to manufacturing lithium-ion batteries—collectively will combine with Ford’s other sourced nickel, significantly contributing to support its EV production targets by the end of 2026.

This agreement is the continuation of PT Vale Indonesia’s Pomalaa Block ground-breaking last November. This block is a National Strategic Project with an investment of up to Indonesian rupiah 67.5 trillion (US$4.5 billion) and is expected to generate 12,000 construction jobs.

This strategic cooperation is one of the flagship projects under the Belt and Road Initiative and Global Maritime Fulcrum synergy, also links Indonesia nickel and cobalt resources to EV makers via Huayou’s advanced capability and HPAL technology, is a great business model of EV value chain and will make a splendid contribution to the EV industry ecology development of Indonesia. The MHP produced in this project will be processed further into nickel sulphate, cobalt sulphate Li-ion battery materials, and ternary PCAM. The joint efforts of three parties aims to create a very positive influence on the economy and social development of Indonesia as well as the global EV industry and its supply chain.

—Dr George Fang, Senior Vice President of Huayou

The project was inaugurated by the Coordinating Minister of Maritime Affairs and Investment, Luhut Binsar Pandjaitan. During his speech, Minister Luhut said Pomalaa Block is the stepping stone for Indonesia to be recognized as a high-quality mineral producer for the global EV ecosystem.

Morgan Stanley & Co. LLC is serving as Ford’s financial advisor in connection with this transaction, while Standard Chartered is providing similar services for Huayou.