China's Gem Delivers Ultra-High Nickel NCM Precursors

GEM

Breakthrough in NCM Technology Strengthens China’s Battery Supply Chain

Chinese battery materials firm Green Eco-Manufacture (GEM) has achieved a major milestone by delivering its first ultra-high nickel content NCM precursors. The delivery, made by its subsidiary Jingmen Gem New Material on 7 April, marks the world’s first large-scale production of 9-series NCM precursors. These materials play a critical role in high-energy lithium-ion batteries, particularly for electric vehicles.

Gem plans to produce 3,000 tonnes per month of 9-series NCM precursors. This follows its successful commercialization of 8-series high nickel content precursors in 2022, signaling its leading position in the high-nickel battery materials market.

Indonesia Operations Drive Nickel Supply Security

To secure raw material feedstock, Gem has built 150,000 t/yr of mixed hydroxide precipitate (MHP) capacity in Indonesia. In the first quarter of 2025, Gem shipped 25,000 tonnes of MHP, achieving over a 95% capacity run rate. The firm also aims to boost its high-nickel precursor production in Indonesia to 50,000 t/yr.

In November 2024, Gem signed a key agreement with PT Vale Indonesia (PTVI) to co-develop a high-pressure acid leaching (HPAL) plant in Central Sulawesi. The facility will produce 66,000 t/yr of nickel metal equivalent MHP, further reinforcing Gem’s supply chain for battery-grade nickel.

China Boosts Imports of Indonesian Nickel

China’s dependence on Indonesian nickel continues to deepen. Imports of MHP from Indonesia surged 73% year-on-year to 258,709 tonnes in the January–February 2025 period. This growth stems from efficient production at Chinese-owned facilities in Indonesia, ensuring a steady flow of critical battery inputs despite global supply chain volatility.

The Metalnomist Commentary

Gem's advancement in ultra-high nickel NCM precursors reflects China’s growing command of the battery materials value chain. By integrating upstream supply from Indonesia and advancing precursor technologies, China is setting the pace in next-generation EV materials while reducing its dependence on traditional suppliers.

GEM Expands NCM Precursor Capacity in Indonesia to Meet Growing Global Demand

Green Eco-Manufacture (GEM)

Green Eco-Manufacture (GEM), a leading Chinese producer of battery metals and materials, has announced plans to significantly expand its nickel-cobalt-manganese (NCM) precursor production capacity in Morowali, Indonesia. This strategic move aims to capitalize on the surging demand for high-nickel ternary precursor materials used in power batteries, particularly in overseas markets like the US and Europe.

Capacity Boost and Strategic Integration

GEM's expansion project will increase its NCM precursor capacity to an impressive 50,000 tonnes per year, a substantial jump from the initially planned 30,000 tonnes per year.  The entire project, with a total investment of 2.15 billion yuan ($294 million), is slated for completion in October. This increased capacity will enable GEM to better serve the growing needs of the electric vehicle (EV) market.

GEM's strategy involves developing its existing facilities in both Indonesia and South Korea to create a vertically integrated industrial value chain. This chain will span from nickel feedstock to precursor materials and ultimately to cathode active material (CAM), thereby strengthening GEM's competitive edge and solidifying its market position in the US and Europe.  This integrated approach will allow GEM to control its supply chain and ensure a stable supply of high-quality materials.

Meeting the Needs of Battery Manufacturers

This expansion comes as GEM recently secured a significant supply agreement with South Korean battery maker EcoPro. In August 2024, the two companies signed a deal for GEM to supply 265,000 tonnes of high-nickel NCM precursors to EcoPro BM, EcoPro's subsidiary specializing in high-nickel power battery ternary CAM for new energy vehicles, between 2025 and 2028.  

Further strengthening their partnership, EcoPro announced plans to collaborate with GEM in the first quarter of the year to establish an integrated production facility in Indonesia, encompassing activities from smelting to CAM production.  EcoPro is also restructuring its operations, planning to merge its battery recycling unit Ecopro CNG and lithium unit Ecopro Innovation.

GEM Ultra-High Nickel Precursor: Mass Shipments Begin from Jinmen

GEM

GEM ultra-high nickel precursor shipments have started, marking a scale breakthrough in EV battery materials. The company will ship 2,000 t/month from its Jinmen plant. As a result, the GEM ultra-high nickel precursor will supply major international battery makers. The milestone positions the GEM ultra-high nickel precursor at the center of next-gen high-energy cathode supply.

Core–shell design targets energy and safety

GEM launched a 9-series quaternary core–shell precursor at mass scale. The three-layer structure upgrades a traditional single-layer design without changing metal ratios. Therefore, manufacturers can raise energy density, cycle life, and safety. Nickel-rich NCM and NCA lines benefit, while safety has long challenged high-nickel chemistries. Meanwhile, GEM’s 8-series core–shell debuted in 2022, with the 9-series unveiled in April.

Shipments accelerate premium cathode supply chains

GEM will dedicate all 2,000 t/month to leading global firms. This supports gigafactory ramps as EV ranges push higher. Moreover, the material suits solid-state batteries under active development. GEM remains a top cobalt refiner and CAM precursor producer. Ternary precursor shipments reached 189,000t in 2024, up 5pc year over year. Consequently, downstream buyers gain volume and design flexibility without requalifying metal blends.

Ultra-high nickel platforms expand OEM options under cost and tariff pressure. However, qualification, safety validation, and powder morphology control remain critical. As a result, process stability at Jinmen will determine long-run competitiveness. Battery makers will watch swelling, thermal runaway margins, and impurity management.

The Metalnomist Commentary

GEM’s core–shell architecture balances high nickel with durability and safety, which buyers demand. Watch how quickly 9-series wins long-term offtakes beyond pilot lines. If Jinmen sustains quality at volume, rivals must match layered particle engineering, not just nickel content.

GEM Expands Critical Mineral Recycling to Strengthen China’s Supply Chain Independence

GEM

High-Purity Germanium and Tungsten Recycling to Double by 2027

Chinese battery materials producer GEM is expanding its critical mineral recycling capacity to support China’s supply chain independence. In its 2024 annual report, GEM announced significant investments in germanium recycling and high-purity refining, driven by Beijing’s resource localization strategy. The company aims to rapidly scale its recycling of gallium, indium, and scandium, all of which are subject to China’s recent export restrictions.

Strategic Metals and Battery Materials Drive Growth

GEM will also broaden recycling operations for minor metals such as molybdenum, tantalum, and niobium. These materials are essential for defense and electronics manufacturing. The company currently recycles over 20 metals from waste batteries, electronics, vehicles, and plastics across its eight Chinese plants and international sites in South Korea, South Africa, and Indonesia.

Doubling Output of Tungsten and Platinum Group Metals

To support industrial demand, GEM plans to double its output of tungsten powder and electronic metals to 20 tonnes by 2027. Tungsten’s high conductivity and melting point make it ideal for semiconductors and photovoltaic thin-film cells. In addition, GEM will build a demonstration plant for platinum, palladium, and rhodium refining, targeting similar output growth by 2027.

Core Battery Material Output Set for 46% Growth in 2025

The company expects a strong rise in core product output—nickel, ternary precursors, cobalt, cathode materials, and recycled batteries—with a projected 46% increase in 2025. From 2025 to 2027, the annual growth rate is forecast to moderate to 36%, still reflecting robust demand for EV and energy storage materials.

The Metalnomist Commentary

GEM’s expansion underscores China’s push for mineral sovereignty in a geopolitically constrained environment. By scaling critical mineral recycling, GEM reduces import dependence while reinforcing its leadership in the global circular economy for strategic metals.

GEM raises CAM and cobalt tetroxide sales amid shifting battery supply chains

GEM

GEM raises CAM and cobalt tetroxide sales in the first half of 2025. GEM raises CAM and cobalt tetroxide sales on stronger consumer electronics demand and Indonesian feedstock growth. As a result, GEM raises CAM and cobalt tetroxide sales while ternary precursor shipments decline.

Product mix shifts and headline numbers

GEM’s cobalt tetroxide shipments reached 14,590t, up 39% year on year. CAM sales rose 74% to 12,399t. However, ternary precursor shipments fell about 14% to 86,000t. The mix reflects electronics-led cobalt oxide demand and slower NCM and NCA precursor offtake.

Securing feedstock with Indonesian MHP capacity

GEM secures cobalt feedstock via Glencore contracts and its Indonesian MHP projects. Total smelting capacity reached 150,000 t/yr nickel metal equivalent in 2024. In January–June, Indonesia produced 43,977t nickel metal equivalent and 3,667t cobalt metal equivalent. Therefore, MHP output mitigated DRC export risks since the 22 February cobalt ban.

Downstream positioning and long-term contracts

GEM signed a supply deal with EcoPro for 265,000t of ternary precursors in 2025–28. The firm also supplies CATL, BYD, LGES affiliates, and Kennametal. Meanwhile, its closed-loop footprint spans battery recycling, cobalt salts, CAM, cobalt metal and powders, and nickel metal.

The Metalnomist Commentary

GEM’s strategy balances near-term cobalt oxide strength with longer-dated ternary commitments. Indonesian MHP integration meaningfully hedges geopolitical risk and price volatility. Watch precursor recovery timing versus EV demand, and CAM margin discipline.

XTC GEM CAM feedstock deal tightens China’s battery materials supply chain

XTC

XTC GEM CAM feedstock deal marks a major step in securing China’s high-end battery materials supply. Under the XTC GEM CAM feedstock deal, XTC New Energy will lock in large volumes of cobalt, nickel and lithium inputs. This XTC GEM CAM feedstock deal supports long-term cathode active material output for NCM, LCO and LFP product lines. As a result, Chinese battery makers gain greater visibility on costs and availability during a volatile raw material cycle.

Long-term CAM feedstock deal anchors XTC’s growth strategy

XTC New Energy agreed to purchase 150,000 t/yr of CAM feedstock from GEM between 2026 and 2028. The package covers cobalt chloride, nickel sulfate, cobalt tetroxide, NCM precursor and lithium salts for large-scale cathode production. This diversified basket reduces single-material risk and helps XTC balance different chemistries across consumer and power batteries. The deal also deepens an existing partnership, signalling confidence in GEM’s ability to deliver consistent quality volumes. Consequently, both companies move closer to a vertically aligned, closed-loop battery materials ecosystem.

XTC has rapidly grown sales of lithium cobalt oxide on the back of device replacement cycles and AI-enabled electronics. Government subsidies that push consumers to upgrade phones and tablets are boosting high-end cobalt-rich cathode demand. Meanwhile, combined sales of NCM and LFP cathodes also rose, reflecting broader growth across energy storage and EV platforms. By locking in feedstock now, XTC can support more aggressive volume and product planning with key OEMs.

China CAM feedstock integration deepens links with global battery OEMs

The agreement reinforces China’s position at the centre of the global CAM and precursor value chain. GEM will channel critical precursors to XTC, which already supplies ATL, Samsung SDI, Murata, LG Chem and BYD. These relationships span mid to high-end consumer devices and extend into power lithium battery producers like CALB and CATL. Therefore, the enhanced feedstock pipeline will indirectly underpin cell production for phones, tablets, EVs and stationary storage worldwide.

Tighter integration between feedstock suppliers and cathode producers can also stabilise pricing and contract structures. Long-term supply deals encourage joint planning on capacity, quality and sustainability metrics, important for global OEM qualification. At the same time, dependence on Chinese CAM feedstock raises questions for western policymakers about diversification and supply security. However, until alternative precursor hubs reach scale, China’s integrated CAM ecosystem will remain a critical anchor for lithium-ion supply chains.

The Metalnomist Commentary

This agreement shows how Chinese CAM producers and recyclers are quietly locking in the next wave of battery growth. As XTC and GEM align on volumes and chemistries, their joint leverage over cobalt, nickel and lithium flows will rise. For non-Chinese OEMs, the deal underscores the urgency of building competitive precursor and CAM capacity outside China.

China's GEM Increases Battery Material Sales in 1H

Sales Surge Driven by Full Capacity

Green Eco-Manufacture (GEM), a leading Chinese cobalt refiner and lithium cathode active material (CAM) precursor producer, reported a significant increase in sales of CAM precursors, cobalt, and nickel for the first half of the year. The company attributed this rise to full capacity operations across its main product lines.

GEM's sales of ternary precursors, including lithium nickel-cobalt-manganese (NCM) and lithium nickel-cobalt-aluminium (NCA), surged by 45% year-on-year to exceed 100,000 tons. The firm also experienced a remarkable 133% increase in ternary CAM sales, reaching 7,119 tons.

Expansion and Strategic Partnerships

In August, GEM secured a supply agreement with South Korean lithium-ion battery CAM manufacturer Ecopro for 265,000 tons of ternary precursors from 2025 to 2028. The company is also expanding its production capabilities, with a new 50,000 tons per year ternary precursor plant in Indonesia set to start operations in the latter half of this year.

GEM's cobalt tetroxide sales soared by 163% year-on-year to 10,500 tons, driven by higher demand from the consumer electronics sector. The company sources cobalt from long-term contracts with Switzerland-based Glencore and from its mixed hydroxide precipitate (MHP) projects in Indonesia.

Nickel Production and Cost Reduction Goals

GEM's nickel MHP shipments from its QMB project in Indonesia doubled to over 20,000 tons nickel metal equivalent during January-June, with a full capacity rate. The firm plans to expand its nickel smelting capacity to 150,000 tons per year by year-end and aims to ship 60,000 tons of MHP in 2024. GEM also targets reducing MHP smelting costs to $7,500 per ton by the end of the year, benefiting from decreased sulfuric acid costs.

The company is involved in recycling power batteries, cobalt, nickel, and tungsten scrap, with recycled cobalt shipments reaching 8,987 tons and power battery recycling up by 37% to 16,300 tons or 1.84 GWh in the first half of the year.

GEM serves a global client base, including South Korean firms like Ecopro, Samsung SDI, SK On, and LGC, Chinese companies such as XTC New Energy Materials and BYD, as well as international entities like Umicore, Sandvik, and Kennametal.

China’s GEM to Back Indonesia’s Green Nickel with HPAL Investment

Green Eco-Manufacture (GEM)

Chinese battery metals leader Green Eco-Manufacture (GEM) has entered into a groundbreaking partnership with Indonesia's PT Vale Indonesia (PTVI) to develop a high-pressure acid leaching (HPAL) project in Central Sulawesi, Indonesia. This venture aims to bolster the green energy transition in the nickel sector, a vital component of the rapidly expanding electric vehicle (EV) industry.

Key Highlights of the HPAL Project

The HPAL facility will process nickel ore supplied by PTVI to produce 66,000 tons per year (t/yr) of mixed hydroxide precipitate (MHP) in nickel metal equivalent. MHP is a precursor for advanced battery materials like nickel-cobalt-manganese (NCM) and cathode active materials (CAM), essential for lithium-ion batteries used in EVs.

Ownership Dynamics and Strategic Growth

Initially, GEM held a 70% stake in the project, while PTVI owned the remaining 30%. However, GEM’s ownership will be reduced to 25% or less, as additional third-party investors join the initiative. This strategic realignment aims to diversify financial backing and enhance the project’s scalability.

Expansion of GEM’s Nickel Ventures

GEM recently completed the second phase of its QMB nickel project in Morowali, Indonesia, achieving a total production capacity of 65,000 t/yr of nickel metal equivalent in MHP. This marks a significant milestone in its push to solidify its footprint in Indonesia’s resource-rich battery ecosystem.

China-Indonesia Collaboration in the EV Sector

The partnership reflects a broader trend of increasing China-Indonesia collaboration in the EV supply chain. Earlier this year, Indonesian mining giant PT Aneka Tambang (Antam) transferred subsidiary shares to China’s Contemporary Amperex Technology Co., Ltd. (CATL), the world’s largest EV battery manufacturer.

As the global EV market continues to expand, these collaborations are poised to make Indonesia a cornerstone of the world’s green energy revolution, leveraging its abundant nickel reserves to meet soaring demand for sustainable battery materials.

LME Approves Listing of China's Greatpower Co. Cobalt Cathode

Greatpower

The London Metal Exchange (LME) has officially approved the listing of Zhejiang Greatpower Co.'s GREATPOWER brand cobalt cathode. This milestone, announced on December 17, 2023, marks a significant step for the Chinese cobalt industry in gaining global recognition. Greatpower, a major player in cobalt production, operates a state-of-the-art cobalt cathode facility in Shangyu district, Shaoxing city, located in eastern China’s Zhejiang province.

Expansion Plans for Greatpower

Since its launch in 2022, the Greatpower cobalt cathode facility has maintained a production capacity of 2,000 tons per year (t/yr). Looking ahead, the company is set to double its output by 2025, with plans to reach 4,000 t/yr. This expansion will help Greatpower meet the growing global demand for refined cobalt, particularly as cobalt remains essential for energy storage technologies, electric vehicle (EV) batteries, and other high-tech industries.

China’s Growing Cobalt Production Capacity

Greatpower’s refined cobalt output, which includes cobalt sulphate, cobalt chloride, and cobalt cathode, contributes to the nation’s rapidly expanding capacity in cobalt metal production. In 2023, the price premium for cobalt metal over cobalt salts has encouraged domestic refineries to increase their production. According to market forecasts, China’s cobalt metal capacity is expected to more than double, reaching around 65,000 tons in 2024, with further potential for growth to 80,000 tons by 2025.

Key players in China's cobalt industry, including Jinchuan, Huayou, GEM, Hanrui, Tengyuan, and Guangxi Yinyi, are expanding their operations. New entrants such as CNGR and New Era Group Zhejiang Zhongneng are also slated to launch production lines in 2024.

Impact of LME Listings

The LME’s approval of cobalt cathodes from China is expected to slightly ease the oversupply in the domestic market. Other Chinese cathode brands already listed on the LME include those from Jinchuan, Yantai Cash Industrial, GEM (Jiangsu) Cobalt Industry, Quzhou Huayou Cobalt New Material, Ganzhou Tengyuan Cobalt New Material, and Zhejiang Greatpower Cobalt Materials. With increasing global demand for cobalt, these listings offer greater market access for Chinese producers while contributing to a more balanced global cobalt supply.

Ascend Trafigura lithium offtake deal locks in 15,000 tonnes for 2027–2031

Ascend Elements

The Ascend Trafigura lithium offtake deal secures recycled supply for the battery chain. Ascend Elements signed a five-year agreement with Trafigura for lithium carbonate deliveries. The Ascend Trafigura lithium offtake deal covers 15,000 metric tonnes from 2027 to 2031. Financial terms were not disclosed.

This lithium carbonate offtake supports Ascend’s expansion plans. The company says the deal strengthens its North America and Europe pipeline. Meanwhile, buyers want low-carbon feedstock and secure volumes. Therefore, long-term offtake contracts are becoming a key recycling growth lever.

Offtake volumes link recycling output to global trading channels

The agreement calls for 15,000 tonnes over five years. Trafigura will take deliveries between 2027 and 2031. However, the market will watch qualification timelines and product specs. Battery recycling lithium carbonate must meet strict impurity limits for cell makers.

Ascend produces precursor cathode active materials from recycled inputs. It also produces battery grade lithium salts from spent batteries and manufacturing scrap. As a result, the Ascend Trafigura lithium offtake deal supports circular sourcing for cathode supply chains.

Europe strategy expands through GEM partnership and recycling scale-up

Ascend is building international reach through partnerships. In September, Ascend partnered with GEM to collaborate on lithium-ion battery recycling in Europe. Meanwhile, Europe needs compliant recycling capacity under tightening battery regulations. Therefore, the company can use offtake visibility to de-risk new plants and financing.

This deal also signals rising trader interest in recycled battery materials. Traders can aggregate volumes and route material to regional conversion hubs. As a result, recycled lithium carbonate may gain a clearer price discovery pathway.

The Metalnomist Commentary

Recycled lithium carbonate will compete harder as new mines ramp up after 2026. Meanwhile, offtake contracts will reward recyclers that prove consistent quality and traceability. Therefore, Ascend should publicize certification and carbon data to defend premiums.

China and Indonesia Strengthen Ties in Critical Minerals and Renewable Energy

Strengthen Mineral

China and Indonesia are poised to deepen their cooperation in critical mineral extraction and renewable energy, marking a strategic move as global demand for clean energy technologies continues to grow. The announcement came during Indonesian President Prabowo Subianto's inaugural visit to China from November 8–10. The collaboration emphasizes joint initiatives in new energy vehicles, lithium batteries, and photovoltaics, reflecting the two nations' shared commitment to energy transition and economic synergy.

Strategic Agreements and Investments

During President Prabowo's visit, China reaffirmed its support for Indonesia's energy sector transformation, pledging to pursue "high-quality" partnerships in digital economies, clean energy, and infrastructure development. Addressing a business forum on November 10, Prabowo welcomed increased investment from Chinese enterprises across a range of industries.

Significant agreements were sealed during the visit, including a high-pressure acid leaching (HPAL) project in Sulawesi, jointly developed by Green Eco-Manufacture (GEM) and mining giant Vale Indonesia. This project will produce mixed hydroxide precipitate (MHP), a critical precursor in battery cathode production, further strengthening Indonesia’s position in the electric vehicle (EV) battery supply chain.

Indonesia’s Growing Role in Global Nickel and Aluminium Markets

As the world’s largest nickel producer, Indonesia is central to global EV and battery markets. According to the International Nickel Study Group (INSG), the country's share of global nickel output is projected to rise to 60.6% in 2024 and 62.8% in 2025, driven largely by Chinese-backed projects.

Additionally, Chinese firms are investing heavily in Indonesia's aluminium industry. Nanshan Aluminium is expanding its alumina refinery in Bintan and constructing a 250,000 t/yr refined aluminium plant. Chalco and Tianshan Aluminium are each building 1mn t/yr alumina plants in Indonesia, signaling a robust growth trajectory for bilateral collaboration in critical mineral production.

Key Projects in Renewable Energy

Chinese battery materials company Changzhou Liyuan, in partnership with the Indonesia Investment Authority (INA), is scaling up its lithium iron phosphate (LFP) plant in Indonesia. By 2025, the facility's production capacity is expected to expand to 120,000 t/yr from its current 30,000 t/yr, making it the largest LFP plant outside China.

These developments underscore the growing interdependence of China and Indonesia in renewable energy and critical minerals, aligning their national priorities with global sustainability goals.

Merdeka Battery Materials Reports Mixed Nickel Output in Q3 Amid Expansions

Merdeka Battery Materials

Indonesian nickel producer Merdeka Battery Materials (MBMA) reported a mixed production performance for the third quarter of 2023. While the company’s nickel ore output doubled due to favorable weather and increased mining capacity, nickel intermediates production experienced a decline.

Nickel Ore Output Surges, Intermediates Decline

During Q3, MBMA produced 4.74 million wet metric tonnes (wmt) of ore from its Sulawesi Cahaya Mineral (SCM) mine. Limonite and saprolite output reached 3.70 million wmt and 1.04 million wmt, respectively, more than doubling compared to the previous quarter. This growth was attributed to better weather conditions and expanded mining equipment deployment.

In contrast, nickel intermediates saw declines. Nickel pig iron (NPI) and low-grade nickel matte (LGNM) production from MBMA’s rotary kiln electric furnaces (RKEF) smelters fell 6.1% quarter-on-quarter to 20,557 tonnes. High-grade nickel matte (HGNM) output dropped by 3.2% to 12,979 tonnes of nickel.

Despite these quarterly dips, the company maintained its 2024 production guidance at 50,000-55,000 tonnes of HGNM and 80,000-85,000 tonnes of NPI.

Strategic Investments and Growth Plans

MBMA's long-term strategy focuses on bolstering output through strategic investments and partnerships. The SCM mine supplies saprolite ore to MBMA’s RKEF smelters and limonite ore to Huayue Nickel Cobalt’s HPAL plants. A second feed preparation plant (FPP), slated for commissioning by mid-2025, is expected to increase limonite ore processing capacity to over 9 million wmt annually.

The company collaborates with leading battery manufacturers to support its limonite production, targeting over 300,000 tonnes per year of nickel in mixed hydroxide precipitate (MHP). Key partnerships include:

• Green Eco-Manufacture (GEM): Joint development of PT ESG and PT Meiming HPAL plants with capacities of 30,000 t/yr and 25,000 t/yr of nickel in MHP, respectively.
• Brunp: Partnership with the subsidiary of Contemporary Amperex Technology (CATL) to establish a 60,000 t/yr HPAL plant for nickel in MHP.

Outlook for 2024 and Beyond

The company’s production guidance for 2024 remains robust, with saprolite ore projected at 4–5 million wmt and limonite ore at 9.5–10.5 million wmt. With the new FPP in operation by 2025, MBMA aims to significantly scale up production and maintain its competitive edge in the rapidly growing battery materials market.

As global demand for nickel intensifies, MBMA's strategic expansions and partnerships position it as a key player in the supply chain for electric vehicle batteries and renewable technologies.

Nickel Ore Supply Security Becomes a Top Priority Amidst Global Demand Fluctuations

Nickel

As the global demand for nickel continues to rise, primarily driven by its critical role in the electric vehicle (EV) sector, securing a steady supply of nickel ore has emerged as a primary focus for smelters and investors. This shift in priority follows a period of tight spot availability due to delayed approvals of Indonesian nickel mining work plans (RKABs), highlighting the challenges and strategic shifts in the nickel supply chain.

Navigating Supply Challenges

The delays in RKAB approvals in Indonesia, the world's top nickel ore supplier, have significantly impacted ore availability, particularly during the monsoon season from May to August. These challenges were exacerbated by slow approval rates and uneven distribution of RKABs among companies and regions. As a result, some smelters were forced to reduce production, while others sought alternative sources, leading to a dramatic increase in nickel ore imports. Notably, imports to Indonesia were 55 times higher in the January-October period compared to the previous year, with the Philippines providing the majority of these imports.

Strategic Adjustments and Future Outlook

To counter these supply uncertainties, smelters are increasingly focusing on securing long-term ore supplies. This strategy is evident in the growing number of collaborations between Chinese investors and mining companies. For instance, Green Eco-Manufacture (GEM) has partnered with Indonesian nickel firm Merdeka Battery Material and also has a joint high-pressure acid leaching (HPAL) project with PT Vale Indonesia, a subsidiary of the Brazilian mining giant Vale. These partnerships are aimed at ensuring a reliable supply of ore for nickel production, crucial for the booming EV market.

Indonesia has approved significant quotas of wet metric tonnes (wmt) for the coming years to meet this demand. However, the unpredictability of RKAB approval timelines and the potential disruptions from new regulatory measures, such as the Simbara system aimed at increasing transparency and curbing illegal mining, could pose ongoing challenges.

Indonesia’s Nickel Ambitions Face Obstacles Amid HPAL Expansion

HPAL

Indonesia is poised to increase its nickel production in the coming years, primarily by boosting its high-pressure acid-leaching (HPAL) capacity. However, this ambitious plan faces significant hurdles, notably the scarcity of sulphuric acid and challenges in managing tailings waste effectively. Despite these concerns, production is still expected to grow, even as the global nickel market anticipates a surplus.

Sulphuric Acid Supply and Tailings Management: Key Challenges

The HPAL process relies heavily on sulphuric acid to extract nickel and cobalt from ore, producing mixed hydroxide precipitate (MHP), which is essential for downstream nickel sulphate and battery production. Indonesia is projected to produce between 325,000 to 345,000 tons of MHP this year, a jump from 269,000 tons in 2023. With several new MHP projects on the horizon, output is expected to rise significantly, potentially tripling to 800,000-900,000 tons by 2026, as highlighted by Indonesia's Deputy Minister Septian Hario Seto during a recent metal industry event in London.

The increase in MHP production will necessitate more nickel ore and sulphuric acid, raising concerns about the sustainability of limonite ore supplies, which could deplete quickly like saprolite ore, currently used for nickel pig iron and matte production. The Indonesian government plans to address these issues with industry stakeholders.

Currently, Indonesia's four operational HPAL facilities—Huayou's Huayue and Huafei projects, GEM's QMB project, and Lygend's HPAL project—have been importing sulphuric acid primarily from China and South Korea. However, the rising cost has led some producers, such as Halmahera Persada Lygend, to switch to cheaper sulphur alternatives. The startup of new smelters, like Freeport McMoran's Manyar in Java and AMNT's copper smelter in Nusa Tenggara, is expected to add 3 million tons per year of acid capacity by 2025, potentially easing supply pressures.

Another critical issue is the proper disposal of tailings waste, which has come under increased scrutiny due to environmental, social, and governance (ESG) standards. The HPAL process generates substantial amounts of waste, with energy consultancy Wood Mackenzie estimating 1.4-1.6 tons of tailings per ton of nickel produced. Three disposal methods—tailings dams, deep sea disposal, and dry stacking—each have their risks, with dry stacking viewed as the more sustainable option. Yet, Indonesia’s wet climate and seismic activity pose challenges for safe waste storage.

To ensure the successful expansion of its HPAL production, Indonesia must secure a stable supply of sulphuric acid and implement sustainable methods for managing tailings waste. Addressing these issues is critical for maintaining the momentum in the country’s nickel production growth while adhering to stricter ESG standards.

Weak NCM Demand Restrains Nickel Consumption Growth in China

Lygend

China’s nickel consumption growth has been constrained this year, primarily due to weak demand in the nickel-cobalt-manganese (NCM) cathode active material (CAM) sector and the increasing market dominance of lithium-iron-phosphate (LFP) CAM.

NEV Battery Market Trends

Despite a 37% year-on-year increase in China’s new energy vehicle (NEV) battery production from January to September, NCM battery growth lagged at 19.2%, while LFP surged by 45.6%, according to the China Innovative Alliance of Automotive Battery Industry.

• NCM precursor output grew by 4%.
• NCM CAM production rose by 10%, highlighting a slower growth trend compared to downstream NEV battery production.
• Nickel sulphate output is projected to decline by 1%, even though total supply is expected to rise by 6% due to increased imports.

The discrepancy in growth rates between upstream, midstream, and downstream sectors is expected to stabilize next year as inventories decline and buying interest increases.

Rising Imports of MHP and Matte

China’s imports of mixed hydroxide precipitate (MHP) and matte, key feedstocks for nickel sulphate and class I nickel production, have risen sharply:

• MHP Imports: Up 17% to 1.07 million tons during January-September, with Indonesia accounting for 57% growth due to increased capacity from Chinese companies such as Lygend’s ONC, GEM’s QMB project, and Huayou’s Huafei facility.
• Matte Imports: Increased by 61% to 341,494 tons, driven by the ramp-up in new capacities.

Transition in Nickel Matte Production

A significant portion of the matte imports consists of low-grade matte (20% nickel content), which is further refined into high-grade matte (70% nickel content) in China for nickel sulphate or cathode production. However, some matte producers have shifted focus to producing nickel pig iron (NPI) due to its higher profit margins.

Nickel Metal Output Outlook

While nickel sulphate production is forecast to dip, China’s overall nickel metal output is expected to surge by 34%, reaching 320,000 tons in 2024. This increase underscores the country’s reliance on imported feedstocks and growing domestic capacity to meet demand.

Future Prospects

As inventories dwindle and buying interest rebounds, 2024 is likely to see a narrowing of growth disparities across the supply chain. However, China’s nickel market remains under pressure from fluctuating demand patterns, shifts in feedstock sourcing, and competition between NCM and LFP technologies.

Ronbay Begins High-Nickel NCM Precursor Shipments from South Korea

Ronbay

Strategic Expansion into Global Supply Chains

Chinese battery material giant Ningbo Ronbay has started shipping ultra-high nickel NCM precursors from its Chungju, South Korea plant. The product contains a minimum of 90pc nickel and targets global battery makers. Current NCM precursor capacity totals 66,000 t/yr — 60,000 t/yr in China and 6,000 t/yr in South Korea.

South Korea’s extensive free trade agreements offer Ronbay significant advantages in bypassing rising trade barriers. The company expects these shipments to strengthen ties with clients in Japan, South Korea, Europe, the US, and Southeast Asia, especially amid the US Inflation Reduction Act and EU Critical Material Act.

Capacity Growth and Recycling Initiatives

Ronbay plans to expand South Korean NCM capacity to 26,000 t/yr and build a 20,000 t/yr plant in Indonesia by 2026. Competitors CNGR, Huayou Cobalt, and GEM are also investing in precursor facilities overseas to mitigate trade restrictions.

The company will launch a global battery recycling system in 2027, with plants in the US, Europe, Japan, and Southeast Asia. This network will process black powder from waste batteries into high-purity precursor materials, though capacity figures remain undisclosed.

Ronbay produced 137,351 t of CAM in 2024, up 34pc year-on-year. NCM accounted for around 120,000 t of sales, while LMFP was added to its portfolio in 2022 through the acquisition of Tianjin Skylandone. The firm targets 130,000–150,000 t of CAM production in 2025, and is building a 20,000 t/yr NCM plant in Poland, with the first phase due this year.

The Metalnomist Commentary

Ronbay’s move to produce high-nickel NCM precursors in South Korea is a calculated response to geopolitical trade pressures. By leveraging South Korea’s trade agreements and diversifying production locations, the firm is securing market access in key EV regions. This multi-pronged strategy — combining capacity expansion with recycling — positions Ronbay strongly in the global energy transition supply chain.