South Korean POSCO Group and China’s Lygend Resources & Technology have signed a memorandum of agreement (MOA) to jointly develop an HPAL plant in Sulawesi, Indonesia. The plant will have the capacity to produce 120ktpy Ni-in mixed hydroxide precipitate (MHP) but will initially be constructed with a first phase targeting 60ktpy Ni. Construction is expected to start this year and first output is anticipated by 2025.

This deal represents yet another HPAL development in Indonesia and takes the number of these announced projects in the country being tracked by Project Blue to eleven (not including multiple phases). There are already three HPAL plants in operation in Indonesia based on the country’s abundant limonite reserves that are exporting MHP to Chinese nickel sulphate producers, supplying the battery sector.

By partnering with Lygend Group, POSCO is collaborating with a company with proven expertise in utilising hydrometallurgical technology. The Chinese firm is already active in Indonesia, producing battery-grade nickel and cobalt intermediates from its PT Halmahera Persada Lygend JV on Obi Island.

POSCO would also secure a major portion of its nickel requirements for use in its ternary battery cathode business and could take it a step closer to becoming self-sufficient in the nickel value chain. The company will also start producing nickel sulphate in H2 from its nickel processing plant in Gwangyang, South Korea, based on converted ferronickel, and it additionally owns a 30% stake in the MHP-producing Ravensthorpe nickel-cobalt operation in Australia.

The company has ambitious plans to expand its cathode production capacity to 610ktpy by the end of the decade. In order to fill its near-term raw material requirement, it recently secured a deal with Huayou Cobalt for which it will receive 160kt precursor material from January 2023 to December 2025. This timeframe is consistent with the development of its Indonesian operation, by which point POSCO will be considerably more self-sufficient in the nickel value chain.

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