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Ford To Use Indonesian Sourcing For Battery Materials

Ford has lined up battery materials for its electric vehicles. It is another piece of the electric vehicle puzzle falling into place.

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

Ceremony Announces Major Plans

All three companies are making equity investments in the Pomalaa Block High-Pressure Acid Leaching (HPAL) Project through a definitive agreement celebrated today at a ceremony featuring Indonesia President Joko Widodo.

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. If you will be part of that production run, here are some things to consider making your decision.

Three-Way Processing Project

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

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“This framework gives Ford direct control to source the nickel we need – in one of the industry’s lowest-cost ways – and allows us to ensure the nickel is mined in line with our company’s sustainability targets, setting the right ESG standards as we scale,” said Lisa Drake, vice president for Ford Model e EV industrialization. “Working this way puts Ford in a position to help make EVs more accessible for millions and to do it in a way that helps better protect people and the planet.”

“This agreement shows it’s not just about what we mine – but how we do it,” said Febriany Eddy, PT Vale Indonesia CEO. “We embed our environmental, social, and governance standards into everything we do. The result is a unique collaboration with global automaker Ford and leading global mineral processor Huayou to invest in this project jointly. This global cooperation aligns with Indonesia’s vision to build a domestic EV ecosystem. It makes PT Vale an important contributor toward addressing the world’s decarbonization challenge, with an investment that will generate local economic benefits and ensure the optimal utilization of Indonesia’s nickel resources.”

Agreement Continues Project

This agreement continues 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 and is expected to generate 12,000 construction jobs.

“Huayou is a technology-driven enterprise leading manufacturer of green, low carbon, high ESG standard new energy battery materials. This strategic cooperation is one of the flagship projects under the Belt and Road Initiative and Global Maritime Fulcrum synergy; it also links Indonesia’s 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 sulfate, cobalt sulfate Li-ion battery materials, and ternary PCAM,” Dr. George Fang, Senior Vice President of Huayou, said. “The joint efforts of three parties aim to positively influence Indonesia's economy and social development as well as the global EV industry and its supply chain.”

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's recognition as a high-quality mineral producer for the global EV ecosystem.

Indonesia Is Key Supplier

“This partnership affirms PT Vale Indonesia as the premier supplier and champion of sustainable and low-carbon nickel, building on our 55-year history as a key partner with a commitment to drive lasting socioeconomic benefits for Indonesia on its path to becoming a critical hub for the global EV value chain,” said Deshnee Naidoo, PT Vale President Commissioner and Executive Vice-President of Vale Energy Transition Metals.

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Morgan Stanley & Co. LLC serves as Ford’s financial advisor with this transaction, while Standard Chartered provides similar services for Huayou.

Marc Stern has been an automotive writer since 1971 when an otherwise normal news editor said, "You're our new car editor," and dumped about 27 pounds of auto stuff on my desk. I was in heaven as I have been a gearhead from my early days. As a teen, I spent many misspent hours hanging out at gas stations (a big thing in my youth) and working on cars. From there on, it was a straight line to my first column for the paper "You Auto Know," an enterprise I handled faithfully for 32 years. Not many people know that I also handled computer documentation for most of my earnings while writing YAN. My best writing, though, was always in cars. My work has appeared in Popular Mechanics, Mechanix Illustrated, AutoWeek, SuperStock, Trailer Life, Old Cars Weekly, Special Interest Autos, etc. You can follow me on: Twitter or Facebook.