EcoPro's Indonesian nickel smelter under construction (EcoPro)
EcoPro's Indonesian nickel smelter under construction (EcoPro)

EcoPro said Thursday that it has completed a 700 billion won ($505 million) first-phase investment in four nickel smelters in Indonesia, securing a stable supply of key battery materials.

Through the investment, the company will be able to secure about 28,500 tons of mixed hydroxide precipitate annually, equivalent to producing around 600,000 electric vehicles.

MHP, a nickel intermediate, is cheaper than refined nickel and contains cobalt needed for producing nickel-cobalt-manganese precursors.

EcoPro has invested in four smelters -- QMB at 9 percent, Meiming at 9 percent, ESG at 10 percent and Green Eco Nickel at 38 percent -- located in the Morowali Industrial Park on Sulawesi Island since 2022.

Green Eco Nickel, which records about 350 billion won in annual revenue and 100 billion won in operating profit, will become a subsidiary of EcoPro Materials through an equity acquisition.

The company posted 56.5 billion won in investment gains from the smelters in the first half of this year, and expects to generate an average of 180 billion won annually through 2030, including profits from MHP sales.

EcoPro said the investment is expected to help offset sluggish demand in the cathode materials sector while diversifying the group’s portfolio and improving profitability.

"The Indonesian project is significant in that it diversifies the group's business portfolio beyond secondary battery manufacturing by entering the smelting industry," said EcoPro CEO Song Ho-jun in a recent online briefing for executives and employees.

Meanwhile, the company is also preparing a second-phase investment through the International Green Industrial Park project in Sambalagi, Sulawesi, starting later this year.

In partnership with Indonesian state-owned PT Vale Indonesia, EcoPro plans to build additional nickel smelters, followed by precursor, cathode and battery cell plants within an integrated production complex.

By securing local nickel feedstock and streamlining logistics, EcoPro aims to cut production costs of high-nickel NCM cathodes by 20-30 percent, reinforcing price competitiveness in the mid- to low-end market.

"EcoPro's entry into the smelting business, along with its cathode materials business, will provide a stable revenue structure," said an EcoPro official.


andreahaneu@heraldcorp.com