Ford steps up as foreign stakeholders surge EV Industry in Indonesia

PT Vale Indonesia Tbk announced it had signed a nonbinding memorandum of understanding (MoU) with China’s Zhejiang Huayou Coblat Co. and Ford Motor Co. The agreement marks a tripartite cooperation in processing the nickel ore produced by PTVI at the Pomalaa Block in Kolaka, Southeast Sulawesi, and is a follow-up to the framework agreement on the Pomalaa high-pressure acid leach (HPAL) project that Vale Indonesia and Huayou signed on April 27.

The Pomalaa project’s estimated total capacity is 120 kilotons per annum (ktpa) of mixed hydroxide precipitate (MHP), which is expected to help kick-start the country’s electric vehicle (EV) manufacturing industry.

The MoU is in line with the government’s EV road map targeting the adoption of 2.1 million electric motorcycles and 400,000 electric cars in the next few years, with at least 20 percent to be manufactured locally by 2025. “We are pleased to welcome Ford in the partnership for the Pomalaa HPAL project. This is a cornerstone project that shows the importance of Indonesia, its people and resources in the drive to electrify the world’s cars while delivering economic growth for Indonesia and maintaining sustainable mining practices,” said Febriany Eddy, CEO and President of Vale Indonesia.

“We are grateful for the Indonesian government’s support for PT Vale, as well as this project. We hope to continue to work with our stakeholders in creating long-term sustainable value and opportunities, particularly for the communities where we operate,” she continued. A study conducted by the University of Indonesia in September 2020 showed that 70 percent of Indonesians were keen to own an EV vehicle instead of a fossil fuel vehicle, citing the environment as the most common reason.

With over 22 percent of the world’s nickel reserves located in Indonesia and the government’s commitment to reach net-zero emissions, developing the local EV industry has big potential. Indonesia has opened its arms to foreign investment in its EV industry. Industry Minister Agus Gumiwang Kartasasmita has applauded the synergy between state-owned enterprises (SOEs) and the private sector in accelerating the development of an integrated EV ecosystem in the country.

“The government is eager to adopt new and renewable energy as well as electric vehicles,” said Agus. He added that the energy transition, renewables adoption and accelerated EV development were among the priority issues of Indonesia’s G20 presidency. Huayou is the world’s leading lithium-ion battery developer and producer, while Vale Indonesia has a solid track record in delivering safe and sustainable nickel production. Its processes does not compromise on environmental safety at its smelters across the country.

Vale, Huayou and Ford all share the core principle of sustainable production with the lowest possible carbon footprint. “This three-way relationship is a creative way to secure the nickel Ford needs to help deliver millions of EVs to our customers, and it keeps our environmental, social and governance [ESG] goals front and center in the process,” said Lisa Drake, Ford’s vice president for EV industrialization, Model e.

“Not only will this partnership with Ford and PT Vale bring to our customers stable and sustainable supply, but [it] will also benefit the increasingly robust EV industry and Indonesian economy,” said Huayou executive vice chairman George Q. Fang. The project is scheduled for completion and operations in 2025, subject to negotiations and the execution of definitive agreements.