(Bloomberg) -- Zhejiang Huayou Cobalt Co., one of the world’s largest nickel producers, is sounding out banks for roughly $2.7 billion in financing for its Ford Motor Co.-backed project in Indonesia, according to people familiar with the matter.
HSBC Holdings Plc and Standard Chartered Plc are arranging the loan and inviting other banks to participate in financing the Chinese company’s battery-nickel facility in Southeast Sulawesi, said the people who asked not to be named as the information is private.
Huayou partnered on the project with Ford and miner PT Vale Indonesia to make battery-grade nickel for electric vehicles. Indonesia accounts for more than half of global nickel output and has been aggressively wooing foreign investment in its domestic processing industry over the last decade or so.
Huayou, HSBC, and Standard Chartered did not immediately respond to requests for comment.
The fundraising comes as benchmark nickel prices trade near a four-year low amid weaker demand from the stainless steel market and slower-than-expected growth in the EV sector.
The Pomalaa plant, would use ‘high-pressure acid leaching’ technology, or HPAL, to make the nickel chemicals known as mixed hydroxide precipitate, from low-grade ores. It is expected to have annual nickel output of 120,000 tons, which would make it one of the biggest HPAL projects in the Southeast Asian country.
The total investment amount for the project would be about $3.8 billion, Huayou said in a filing last December. Huayou has a 73.2% stake, while Vale has 18.3%, and Ford has an initial 8.5% holding with an option to raise it to 17% within an agreed timeframe.
Huayou said last year construction of the Pomalaa plant would require about three years. It has not provided an updated timeline but said earlier this year preliminary work had been carried out on the project.
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