Ecopro installs key reactor at Indonesia nickel smelter, targets operation by Q2 next year

Ecopro founder Lee Dong-chae (fifth from right) and other key attendees pose for a photo at the reactor delivery ceremony held Wednesday at the BNSI smelter construction site in Sulawesi, Indonesia. [Ecopro]

Ecopro is accelerating construction of its nickel smelter in Indonesia. With the delivery of the core equipment used to extract nickel from ore, the company has moved closer to its targets of completing the facility by year-end and beginning full operation in the second quarter of next year.

Ecopro said Thursday it held a reactor delivery ceremony Wednesday at the BNSI smelter construction site in Sulawesi, Indonesia.

Ecopro founder Lee Dong-chae, Ecopro CEO Song Ho-jun and South Korea's Ambassador to Indonesia Yoon Sun-gu attended the event.

On the Indonesian side, attendees included Rosan Perkasa Roeslani, Indonesia's minister of investment and CEO of Danantara; Maruf Syamsuddin, president director of MIND ID; and Bernardus Irmanto, president director of PTVI. GEM founder and chairman He Kaihua and other officials attended from China.

The BNSI smelter is a nickel smelting project in Indonesia in which the Ecopro group holds a majority stake. Ecopro and Ecopro BM together hold a combined 39 percent stake, while Indonesian state mining company PTVI holds 30 percent and China's GEM holds 21 percent. Negotiations are ongoing with strategic investors, including Indonesia's sovereign wealth fund, over the remaining 10 percent.

The smelter is designed to reach an annual nickel production capacity of 90,000 tons — enough to supply about 2 million electric vehicles. Three reactors, each with a production capacity of 30,000 tons, will be installed at the BNSI site. Two have now been delivered, with the third scheduled to arrive in September.

An autoclave reactor, the core equipment for nickel smelting, is delivered to the BNSI smelter construction site in Sulawesi, Indonesia. [Ecopro]

The reactor is the central piece of equipment in the high-pressure acid leaching, or HPAL, process. It reacts nickel ore with a sulfuric acid solution under high temperature and pressure to extract valuable metals including nickel and cobalt. The material then undergoes neutralization and precipitation to produce mixed hydroxide precipitate, or MHP, an intermediate nickel product.

The reactor delivered measures 5.9 meters in diameter and 48.4 meters in length. Ecopro said the delivery marks the project's transition from the early civil and structural construction phase into the installation of smelting process equipment.

Construction at the BNSI smelter began last year. A cumulative workforce of more than 2,000 people has been deployed to date, and work on surrounding roads and port infrastructure is nearing completion. Construction of major facilities including a sulfuric acid plant and support buildings is also proceeding on schedule. The company expects to complete the facility and begin trial production as early as year-end, with full commercial operation targeted for the second quarter of next year.

In conjunction with the reactor delivery ceremony, the Indonesian government designated 71.47 hectares around the BNSI smelter as a bonded zone. The designation simplifies customs and tax procedures for importing and exporting raw and auxiliary materials such as ore, sulfuric acid, equipment and subsidiary materials. Certain taxes, including import value-added tax and import income tax, are also expected to be deferred or exempted, reducing the smelter's operational burden.

Ecopro aims to broaden its nickel raw material procurement base through this investment. Nickel and other critical minerals account for a large share of the cost of NCM cathode materials, making lower nickel costs and a stable supply chain directly tied to cathode material competitiveness.

The Ecopro group has secured rights to procure 29,000 tons of nickel annually through the IMIP project in Indonesia since 2022. With an additional 36,000 tons from the BNSI investment, the group's total annual nickel procurement rights will reach 65,000 tons.

An aerial rendering of the IGIP industrial complex under development in Sulawesi, Indonesia. The BNSI smelter is a nickel smelting project being built within the complex. [Ecopro]

Securing critical raw materials and navigating supply chain regulations have become equally pressing concerns for the electric vehicle battery materials industry. As the US clean vehicle tax credit restricts the use of battery components and critical minerals involving foreign entities of concern, the need to diversify supply chains away from China has grown more urgent.

Ecopro believes nickel produced at BNSI will qualify as a non-prohibited foreign entity, or Non-PFE, material, allowing it to comply with US supply chain regulations. Although China's GEM holds a minority stake, Ecopro and its Indonesian partners hold a larger combined share — a structure the company says reduces regulatory risk.

Once the BNSI smelter is operational, Ecopro will be able to build a supply chain running from smelting nickel sourced from local Indonesian mines, to processing it into battery materials, through to electric vehicle batteries.

Ecopro founder Lee Dong-chae said the reactor delivery "marks the BNSI project's entry into the full-scale equipment installation phase," adding that "BNSI will serve as a symbol of international cooperation between South Korea and Indonesia, and become a key raw material supply hub supporting the global electric vehicle and battery industry."

Rosan Perkasa Roeslani, Indonesia's minister of investment and CEO of Danantara, said the BNSI project "is a symbol of a global partnership built on the shared vision of three companies — South Korea's Ecopro, China's GEM and Indonesia's PTVI," adding that it "will mark an important step in Indonesia's transformation from a simple raw materials exporter into a high-value-added industrial powerhouse."

GEM founder and chairman He Kaihua said the reactor installation "is a historic moment heralding a powerful start toward the goal of completing construction by end-2026 and beginning commercial production in 2027," and praised Minister Rosan's pledge of round-the-clock support as "a commitment that best demonstrates Indonesia's outstanding investment environment."

kwater@heraldcorp.com