Ecopro Secures 65,000 Tons of Nickel in Indonesia, Completes Korean EV Value Chain

Secures 39% Stake in Indonesian Smelter, Subsidiary Raises 1.2 Trillion Won

65,000 Tons of Nickel Secured... Strengthening Competitiveness in Ternary Batteries

Ecopro Group has secured a 39% stake in the BNSI smelter located within the International Green Industrial Park (IGIP) in Indonesia, becoming a major shareholder through the second phase of investment in the Indonesian nickel smelter project. With the acquisition of supply rights to a total of 65,000 tons of nickel, the company is expected to accelerate the stabilization of the core mineral supply chain and the strengthening of competitiveness in ternary batteries.

View of the BNSI smelter site under construction in Sulawesi, Indonesia. Ecopro

Currently, in the global electric vehicle market, Chinese companies are establishing value chains that encompass everything from finished vehicles to battery cells, materials, and key minerals. In contrast, South Korea has a high dependence on China for sourcing key minerals, leading to ongoing concerns about its relative structural vulnerability.

In this context, Ecopro's participation as a major shareholder in the Indonesian nickel smelter and the securing of production infrastructure with an annual capacity of 90,000 tons (enough for 2 million electric vehicles) is considered significant for supply chain stability.

In the global battery market, South Korea's ternary batteries are competing against China's lithium iron phosphate (LFP) batteries. According to market research firm SNE Research, LFP batteries accounted for 59% of the total 542,000 tons of global cathode material loadings in the first quarter of this year, surpassing ternary batteries, which held a 41% share.

Although ternary batteries, made from nickel, cobalt, and manganese, offer superior performance, they are currently losing ground to the relatively inexpensive LFP batteries.

Nickel accounts for 40% of the cost of ternary batteries. If Ecopro can source nickel from the Indonesian smelter and lower production costs, the price competitiveness of ternary batteries is expected to be further enhanced. Academia also expects that securing nickel sovereignty through this investment will serve as an opportunity to strengthen the competitiveness of national industries, including aerospace and defense.

Ecopro believes that although the initial purchase cost of ternary batteries is higher than that of LFP batteries, they are much more economical when considering the entire battery life cycle, including recycling. Ternary batteries can recover more than 90% of nickel, cobalt, and manganese through recycling, resulting in a cost-benefit ratio of 1.06. In contrast, the figure for LFP batteries is only 0.44, indicating a lack of economic viability.

To this end, Ecopro established a closed-loop system (CLS) ranging from lithium processing to recycling when it built a large-scale battery cathode material plant in Pohang in 2020. Previously, Ecopro had secured 29,000 tons of nickel through four smelters, and with this new investment, it has added 36,000 tons, bringing its total supply rights to 65,000 tons.

The investment funds were raised through a paid-in capital increase by its subsidiary, Ecopro BM. The total funds raised amounted to 1.2 trillion won. Of this, 915 billion won will be used to secure the BNSI stake and for the remaining investment in its Hungarian subsidiary. 135 billion won will be allocated to working capital such as raw material purchases, and 150 billion won will be invested in facility capital.

This content was produced with the assistance of AI translation services.