JAKARTA (Reuters) – Indonesia’s Merdeka Battery Materials plans to build two nickel processing plants to make products used in batteries for electric vehicles with a combined capacity of 240,000 tonnes, its chief executive said on Thursday.
The company is offering 10.24% of its shares in an initial public offering set for April 12-14 to raise 8.75 trillion rupiah ($581.20 million), according to a prospectus issued this week. An additional 1.01% shares could be issued in case of oversubscription which could put the maximum proceeds of the IPO at 9.619 trillion rupiah.
The company, a unit of Merdeka Copper Gold, will use some of the proceeds from the IPO to help finance the first stage development for its first high pressure acid leach (HPAL) plant, chief executive Devin Ridwan told reporters.
“We are planning to build two HPAL plants with 120,000 tonnes capacity each,” Devin said, adding China’s stainless steel giant Tsingshan Holding Group will be a strategic partner to develop an industrial park to house the HPAL projects.
Development of the initial 60,000 tonnes capacity of the firs HPAL plant is underway, with $1.28 billion investment, and it is expected to start operations in 2025, he said.
He declined to disclose the total investment for the overall planned capacity. The company is now in negotiation with a potential partner for the second HPAL plant.
Merdeka Battery controls a nickel mine with one of the world’s biggest ore resources which could support its production for the next 20 years, Devin said, citing a review by Wood Mackenzie.
The company currently has production capacity of 38,000 tonnes of nickel pig iron through two existing smelters and a third smelter with 50,000 tonnes capacity is expected to start operation in the second half of the year.
Nickel-rich Indonesia is trying to become a major player in the EV industry and had attracted billions of dollars of investment into processing the ore into metals and materials used in batteries. Merdeka Battery would be the second nickel company to launch an IPO in Indonesia this year after PT Trimegah Bangun Persada, which is expected to raise $647 million through the shares sale.
($1 = 15,055.0000 rupiah)
(Reporting by Fransiska Nangoy; Editing by Ed Davies)
