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Britishvolt, Indonesia's VKTR to develop sustainable nickel sulfate supply chain


Companies to establish joint venture called Indovolt BV VKTR

JV to initially focus on developing nickel sulfate refinery in Indonesia

Nickel sulfate supply details to be disclosed later in 2022

  • Author
  • Jacqueline Holman
  • Editor
  • Ankit Ajmera
  • Commodity
  • Electric Power Energy Transition Metals

UK-based electric vehicle battery maker Britishvolt has signed a deal with Indonesian conglomerate Bakrie & Brothers' VKTR division to jointly develop sustainable nickel sulfate supply from Indonesia for Britishvolt's gigafactory in Blyth, Northumberland, the company said March 29.

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The two companies have signed a memorandum of understanding for a joint venture called Indovolt BV VKTR for nickel supply and battery production. The JV will initially focus on developing a nickel sulfate refinery in Indonesia that will be eventually powered by renewable energy, Britishvolt said.

The partnership would help "establish a secure supply of nickel to the UK at a time when raw materials are in the spotlight as the age of the battery really gets going," Britishvolt CEO Orral Nadjari said in a statement. "Secure, sustainable supply chains are essential for a successful energy transition."

Britishvolt will follow strict environmental, social and governance standards for nickel supply in Indonesia, Chief Communications Officer Ben Kilbey told S&P Global Commodity Insights. Nickel mining in Indonesia is not known for being environmentally friendly.

"We will be passing best practice on to our supply chain. Our aim is for 25 kg/kWh of CO2 versus the industry average of 66 kg/kWh," Kilbey said.

Bakrie & Brothers has a clear vision of building Indonesia's renewable energy infrastructure to empower a clean air future for Indonesians, delivered in part through electrification of mobility, and improve the country's renewable energy creation and distribution, according to Kilbey.

S&P Global Commodity Insights assessed spot battery-grade nickel sulfate with minimum 22% nickel content and maximum 100 ppb magnetic material at Yuan 45,000 ($7061.70)/mt DDP China March 28, up 32.7% since the start of 2022.

Britishvolt started constructing its GBP2.6 billion ($3.4 billion), 30 GWh lithium-ion battery gigaplant in Blyth early-September 2021. The gigafactory will be built in three phases of 10 GWh each. Britishvolt also plans to build a second 60 GWh gigafactory in Quebec.

The company's strategic roadmap includes creating lower carbon, transparent supply chains and securing raw materials. Britishvolt already has a strategic partnership with Glencore for the supply of responsibly sourced cobalt.

Localized battery production

Britishvolt and VKTR will study the potential development of a gigafactory in Indonesia and other locations, with the main aim of driving embedded carbon out of the supply chain, Britishvolt said.

Ownership and operatorship of any new gigafactories would be set out over the coming months, Kilbey said. "All options are on the table ... as the relationship matures and progresses to a fully formed JV," Kilbey said.

VKTR has access to nickel metal supply and nickel sulfate conversion ability. The company recently facilitated the deployment of electric buses in Indonesia.

The Indonesian company has been looking for a battery technology partner to support the development of localized battery production capabilities of about 15 GWh via a JV. VKTR will supply some nickel to Britishvolt, with supply details to be disclosed later in 2022.

Indonesia, the world's largest nickel producer, is building its own electric vehicle industry. The country aims to reach net zero carbon emissions by 2060.

The UK Government and Government of Indonesia are in talks to collaborate on electric vehicles value chains and offshore wind power generation, Britishvolt said.

"We will create in-country value in Indonesia, rather than refining just export," Britishvolt Global COO Timon Orlob said. "The deal gives us security of nickel from the largest source in the world."