Ford has joined Brazilian mining giant Vale and China’s Zhejiang Huayou Cobalt in investing in a nickel processing plant in Indonesia, as the automaker steps up efforts to secure supplies of battery materials for future electric vehicle (EV) production.

Local subsidiary PT Vale Indonesia began building a nickel processing plant last November in Pomalaa on the island of Sulawesi, where it also has a nickel mine. The US$4.5bn jointly-owned high-pressure acid leaching (HPAL) plant was scheduled to be operational in 2026 with annual capacity of 120,000 tons of mixed hydroxide precipitate, a material extracted from nickel ore.

Indonesia was estimated to have the world’s largest reserves of nickel and had recently introduced policies to help develop downstream processing industries. The government banned the export of unprocessed nickel ore in 2020, forcing exporters to add local value.

Batteries currently account for over 40% of the cost of an EV due in large part to high prices of battery minerals including lithium, nickel and cobalt.

Ford has battery manufacturing joint ventures with South Korea’s SK On and LG Energy Solution, and recently signed a new technical partnership with China’s Contemporary Amperex Technology (CATL) to produce batteries in the US.

Like other automakers including Volkswagen and Mercedes-Benz, Ford is now getting increasingly involved in the battery supply chain to ensure it has sufficient access to materials.

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Ford ended Indonesian vehicle production in Indonesia in the 1990s and exited the market completely a decade ago, although it still manufactures in Thailand and Vietnam.

Christopher Smith, the automaker’s chief government affairs officer, said the company’s direct investment “will help Ford ensure that the nickel used in its EV batteries is mined and produced within the same ESG standards as our other businesses around the world”.

Separately, PT Merdeka Battery Materials this week said it planned to build two nickel processing plants in the country with a combined capacity for 240,000 tons of EV battery materials per year. The company, part of the Merdeka Copper Gold group, plans to raise IDR8.745trn (US$583m) in an IPO in April to fund its expansion.