The two companies have signed a framework agreement to build a plant that will use high-pressure acid leaching to refine the mineral and produce 66,000 tons per year of various compounds, including cobalt.

Chinese company specializing in the recycling of non-ferrous metals and secondary materials GEM Co. and the Indonesian subsidiary of Brazilian mining company Vale have reached a US$1.42 billion (1.334 billion euros) agreement to build a nickel processing plant in Sulawesi (Indonesia).

The two companies have signed a framework agreement to build a plant on the island that will use high-pressure acid leaching (HPAL) to refine nickel ore and produce 66,000 tons per year of various compounds, including cobalt. These will be obtained using 'green' processes.

GEM will have a 25% stake in the project, while Vale will acquire 30% and the remainder will go to a third party. GEM and Vale will also study the possibility of embarking on cathode and precursor materials plants.

The partnership came during Indonesian President Prabowo Subianto's visit to China and is part of the South Asian nation's interest in increasing the extraction of critical minerals to create its own value chain around batteries and electric vehicles.

This news follows the exit in June of the German company BASF from a joint venture with the French company Eramet in a nickel and cobalt plant in Weda Bay (Indonesia) for 2.6 billion dollars (2.442 billion euros). The site would have produced 67,000 tonnes of nickel and 7,500 tonnes of cobalt per year.