Nickel plays a vital role in batteries for electric cars. China dominates its production with an iron fist

China is not part of the select group of countries with the largest nickel reserves on the planet. According to Statista datait doesn’t even show up top five. The Asian giant, however, dominates with an iron fist the production of this transition metal so demanded by the automotive sector in the midst of the energy transition towards zero-emission alternatives.

The leading role that the country led by Xi Jinping holds in terms of inputs considered elementary has not occurred overnight, but has evolved hand in hand with certain strategic movements directed towards Indonesia. You may wonder what relevance the aforementioned archipelago has in this scenario. The answer is simple: its nickel reserves.

Indonesia, on the cusp next to Australia

Indonesia competes head to head with Australia at the level of reserves in metric tons of nickel, but the differences appear when we talk about production. The first is the world’s largest nickel producer, while the second is outside the podium and in a distant fifth place. This is precisely where China and its trade relations with the Indonesians come into play.

A little less than a decade ago, the archipelago was a practically insignificant player in the production of nickel for electric car batteries. The axis of the problem was in the complex process of extracting nickel from its laterite reserves for the automotive sector. What was extracted had other purposes, such as the production of alloys for heavy industry.

Things started to change in 2018. As collected by Reutersthe Chinese company GEM joined CATL, Tsingshan, among others, to start up a nickel production plant based on the nickel process. high pressure acid leach (HPAL). It was a risky move, since the aforementioned process had been at the epicenter of problems and cost overruns.

But the project was sponsored by Chinese companies that, thanks to industrial partners from the same country, had been improving the process. China Enfi Engineering Corporation had designed the HPAL plant operated in Papua New Guinea that had served as a model for the Asian giant’s mining ambitions outside its territory. The plan finally started to work.

The HPAL facilities were losing their bad reputation and other Chinese companies did not hesitate to adopt this technology to extract and process nickel in Indonesia. By 2022, collects Bloombergthe investment of different actors from the Asian giant in the archipelago had exceeded $14.2 billion.

In recent years, Indonesia’s nickel exports have grown substantially and China has consolidated its power in the industry, but environmental concerns have been raised. Although the techniques used at the Chinese facilities have evolved to be more cost and production efficient, the mainstays of high pressure acid leaching have remained intact.

laterite leaching, detail different studies, requires a complex treatment at high temperatures. Among its features is the high energy consumption required for the process, generally from carbon dioxide emitting sources, and the management of a huge amount of chemical waste that may contain heavy metals.

Since Chinese and Indonesian environmental policies are not usually as stringent, some residents fear that, in the absence of thorough government control, the waste could end up in uninhabited areas or even in the ocean. In fact, point outChinese companies operating in Papua New Guinea have been accused of failing to properly treat waste.

Harita Group, the group in charge of operating the first HPAL plant in Indonesia, ensures that it has a secure storage process for waste from your plants. In addition, he points out that government laws do not allow actors involved in nickel processing to dump waste into the ocean.

There are currently at least three Chinese nickel processing plants in Indonesia, but companies from the Asian giant want to continue to gain prominence in a key field. In this dynamic, it is impossible to ignore the trade war between the United States and China, and the increasingly risky movements that are carried out on one side of the planet and the other.

While Washington seeks to harm Beijing’s emerging semiconductor industry and even limit access to advanced chips. From the Asian country, for their part, they respond with restrictions towards memory manufacturer Micron and, most worryingly, towards the export of gallium and germanium. Will the next move come from the nickel side? In time we will know.

Images: alchemist-hp | B Mat an gelo | CHUTTERSNAP

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