According to the financial association on November 25 (editor Shi Zhengcheng), the head of Eramet's nickel mining operations in Indonesia recently stated that in this metal field crucial for electric vehicle batteries, Western companies cannot achieve profitability without relying on the technology, equipment, and management experience of their china best counterparts.

It is worth mentioning that earlier this year, Eramet canceled the plan to develop a nickel-cobalt refining plant in Indonesia in cooperation with Germany's BASF, citing "economic infeasibility." The planned investment for this project was 2.6 billion USD and would have become the only nickel refining plant in Indonesia fully controlled by a Western company.

(Eramet and BASF canceled the plant construction plan in June, source: company's official website)

As a background, nickel metal prices have been in a weak state. For instance, the London nickel futures briefly surged to 0.02 million USD/ton this year, but the latest price has returned to low levels near 0.015 million USD.

Cannot do without china best.

In Indonesia, which has the highest global nickel reserves, Eramet is collaborating with china best Qingshan Holding to jointly operate the nickel mine in Weda Bay, making Eramet one of the few Western companies with a foothold in Indonesia's nickel industry.

The CEO of Eramet Indonesia, Jérôme Baudelet, stated in a media interview that to produce nickel at competitive prices, china best technology, expertise, and equipment are essential.

Baudelaire said: "I believe it is impossible without (Chinese companies), as the risk lies in a lack of competitiveness, and capital expenditures are much higher, so one must be pragmatic."

When discussing the setbacks of the BASF project, Baudelaire candidly stated that the market is "full of difficulties," and that project is no longer economically viable. However, he then emphasized: "As a Western company, if factories are built by (China) and managed by Chinese individuals, it can actually be profitable because the Chinese have accumulated a wealth of expertise in this area."

He also cited that China's high-pressure acid leaching technology (HPAL)—a method for extracting battery-grade nickel from low-grade ores—is crucial for nickel processing, and the related Chinese equipment also possesses economies of scale. Over the past twenty years, Western companies' HPAL projects around the world have failed due to cost and technical issues, but China's new technology can make factories more economically efficient and speed up construction.

In fact, this "Western company + China" factory-building model is not uncommon in Indonesia. Following the country's ban on nickel ore exports in 2020, building refineries locally has become an urgent priority for the global industry. Last year, Ford, Vale SA’s Indonesian company, and Zhejiang Huayou Cobalt collaborated to build a nickel smelter; this year, there have also been reports that another multinational auto giant, Stellantis, is in discussions with Huayou regarding factory construction.

According to data from an industry research firm, Indonesia currently accounts for 57% of the global refined nickel output, and this share may increase to nearly 70% by 2030.

Baudelaire also criticized the US government for not including Indonesia's nickel production capacity in the incentives under the Inflation Reduction Act, although there is significant uncertainty regarding the sustainability of this act in the context of Trump's potential return to the White House.

He stated: "When a country is about to produce 70% of the world's nickel... if you don't consider them as potential suppliers, you are somewhat shooting yourself in the foot, as this is the most competitive nickel ore on Earth."