Chengtun halts Indonesian nickel matte project as battery materials economics shift

Chengtun

Chengtun halts Indonesian nickel matte project after reassessing the market outlook. The company says the investment no longer meets expectations. As a result, Chengtun halts Indonesian nickel matte project before construction begins.

The paused plan targeted Weda Bay on Halmahera, Indonesia. Chengtun formed a venture with a planned $245mn investment. The facility aimed for 40,000 t/yr of nickel matte in nickel equivalent.

Why Chengtun paused Weda Bay expansion

Chengtun halts Indonesian nickel matte project while it restructures its Indonesian growth plan. The project missed its original late-2023 launch window. However, it never advanced beyond planning and preparation.

Chengtun will dissolve the ChengMach Nickel venture after the halt. The decision reduces near-term supply growth expectations at Weda Bay. Therefore, market participants may reassess which projects stay financeable.

Meanwhile, Chengtun keeps operational flexibility through its Youshan Nickel project at Weda Bay. The site can switch output across high-nickel matte, low-nickel matte, and NPI. That flexibility helps the company respond faster to changing price signals.

What it means for nickel sulphate and NCM battery supply

Nickel matte feeds nickel sulphate production for battery materials. Nickel sulphate supports NCM precursor manufacturing alongside cobalt and manganese sulphates. As a result, the pause signals pressure across the upstream EV battery chain.

Battery producers still require stable nickel units and consistent chemistry. However, producers now scrutinize conversion routes and margin stacking more aggressively. Therefore, integrated refiners may capture advantage when they control feed and logistics.

The decision also highlights Indonesia’s evolving role in battery metals. Indonesia still offers scale and resource depth at Weda Bay. Yet investors now demand clearer returns across sulphate, precursor, and cathode pathways.

The Metalnomist Commentary

Chengtun halts Indonesian nickel matte project as the industry shifts from growth-at-all-costs to margin discipline. However, flexible plants will still win when demand rebounds. The next cycle will reward operators who can pivot between battery and stainless markets.

China's Youshan to Build First Overseas LFP Plant in Indonesia

Youshan New Material Technology

Chinese lithium iron phosphate (LFP) producer Zhejiang Youshan New Material Technology has announced plans to build its first overseas LFP production plant in the Indonesia Pomalaa Industry Park (IPIP). The plant will have a nameplate capacity of 50,000 t/yr, with construction expected to take 16 months. Production is slated to begin in the first half of 2026, marking a significant milestone in Youshan’s global expansion strategy.

Founded in 2018, Youshan specializes in the research and development of LFP materials and operates under the ownership of Huayou Holdings Group. Huayou Holdings is also the largest shareholder of Huayou Cobalt, a major player in the production of battery metals and cathode active materials.

Huayou Cobalt's Growing Presence in Indonesia

Youshan's announcement follows Huayou Cobalt’s aggressive investments in Indonesia’s battery materials sector. The company has commissioned production facilities for mixed hydroxide precipitate (MHP), nickel matte, and lithium nickel-cobalt-manganese (NCM) precursors. In October, Huayou launched its first overseas high-nickel ternary battery precursor plant in Indonesia, highlighting the country’s critical role in global battery materials supply chains.

Other Chinese producers, such as Jiangsu Lopal Tech, have also established LFP production in Indonesia. Lopal Tech began operations at its Indonesia-based plant earlier this year, signaling a broader trend of Chinese firms leveraging Indonesia’s natural resource wealth and favorable industrial policies to expand their global footprints.

LFP Demand and Price Outlook

The global market for LFP materials is surging, driven by strong demand from the energy storage battery sector and the growing adoption of lithium-ion batteries. Exporters are also ramping up shipments to overseas markets in anticipation of higher US tariffs on battery imports starting in 2025. As demand rises, major producers are expected to increase LFP prices in the near term.