JAKARTA (Reuters) - Nickel miner Vale Indonesia, China's Zhejiang Huayou Cobalt and U.S. car maker Ford Motor (NYSE:F) signed a non-binding memorandum of cooperation to build a plant in Indonesia to extract nickel chemicals, Vale said in a statement on Thursday.
The companies plan to create a partnership to build a plant to produce 120,000 tonnes per annum of mixed hydroxide precipitate, material extracted from nickel ore that would be used in batteries for electric vehicles.
Vale said the new partnership with Ford will be built on its framework agreement with Huayou, signed in April. Under the April agreement, Huayou will develop the project in Southeast Sulawesi and Vale will have rights to acquire up to a 30% stake in the project.
"This three-way relationship is a creative way to secure the nickel Ford needs to help deliver millions of EVs for our customers and it keeps our environmental, social and governance goals front and center in the process," Lisa Drake, Ford's vice president of EV industrialization, said in the statement.
"Not only will this partnership with Ford and PT Vale bring to our customers stable and sustainable supply, but also will benefit the increasingly robust EV industry and Indonesian economy," Huayou's Executive Vice Chairman, George Q. Fang, said in the statement.
The project is expected to be completed in 2025.
Indonesia is keen to utilise its rich nickel reserves to attract investment into metal processing, production of EV batteries material and building EV onshore.
The government from 2020 banned export of unprocessed nickel ore to ensure supply for existing and potential investors.