June 30 (Asia Today) — South Korean battery materials producer EcoPro Group is expanding its investment in an Indonesian nickel smelter to more than double its access to the critical mineral used in electric vehicle batteries.

EcoPro and its subsidiary EcoPro BM plan to increase their combined stake in the Bahodopi Nickel Smelting Indonesia project to 39%, becoming major shareholders and taking a leading role in its development. The smelter is under construction at the International Green Industrial Park on the Indonesian island of Sulawesi.

The total investment is estimated at about 1.5 trillion won, or $967 million, based on an exchange rate of 1,550.77 won per dollar.

EcoPro completed the first phase of its Indonesian investment over the past four years, securing rights to about 29,000 metric tons of nickel. Once the second phase is completed, the group expects its total nickel supply rights to reach about 65,000 metric tons.

The group also plans to increase the BNSI smelter’s annual production capacity from the originally planned 66,000 metric tons to 90,000 metric tons. EcoPro said that would be enough nickel for batteries used in about 2 million electric vehicles.

The investment is part of EcoPro’s effort to secure raw materials directly and reduce the cost of nickel-rich cathode materials used in nickel-cobalt-manganese batteries.

EcoPro said it intends to establish an integrated supply chain covering nickel, precursors and cathode materials. The company said the structure is designed to meet U.S. requirements limiting reliance on prohibited foreign entities in clean-energy supply chains. U.S. tax rules restrict access to certain clean-energy credits when components or critical minerals receive material assistance from such entities.

EcoPro expects greater control over raw-material procurement to improve its cost competitiveness and strengthen its ability to win orders from global battery-cell manufacturers and automakers.

EcoPro BM will finance the investments through a 1.2 trillion won, or about $774 million, rights offering. Its board approved the issuance of 9,900,990 new common shares Tuesday.

Of the proceeds, 915 billion won, or about $590 million, will be used to acquire the BNSI stake and complete remaining investments in EcoPro BM’s Hungarian subsidiary.

An additional 135 billion won, or about $87 million, will be used as operating capital, including purchases of raw materials. The remaining 150 billion won, or about $97 million, will finance production facilities.

EcoPro, the group’s holding company, plans to subscribe for more than 120% of the shares allocated to it. The company said the decision demonstrated confidence in the Indonesian mineral business and a commitment to minimizing concerns about the dilution of shareholder value.

“This rights offering is a strategic decision to establish an early position in the global nickel market and improve our competitiveness in nickel-cobalt-manganese cathode materials,” EcoPro BM Chief Executive Officer Choi Moon-ho said.

“By combining EcoPro’s high-nickel technology with a decisive cost advantage, we will work to secure leadership in the global market for nickel-based batteries,” Choi said. EcoPro BM’s official English-language materials identify its chief executive as Choi Moon-ho.

— Reported by Asia Today; translated by UPI

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