Merdeka Battery Materials Reports Mixed Nickel Output in Q3 Amid Expansions

Merdeka Battery Materials

Indonesian nickel producer Merdeka Battery Materials (MBMA) reported a mixed production performance for the third quarter of 2023. While the company’s nickel ore output doubled due to favorable weather and increased mining capacity, nickel intermediates production experienced a decline.

Nickel Ore Output Surges, Intermediates Decline

During Q3, MBMA produced 4.74 million wet metric tonnes (wmt) of ore from its Sulawesi Cahaya Mineral (SCM) mine. Limonite and saprolite output reached 3.70 million wmt and 1.04 million wmt, respectively, more than doubling compared to the previous quarter. This growth was attributed to better weather conditions and expanded mining equipment deployment.

In contrast, nickel intermediates saw declines. Nickel pig iron (NPI) and low-grade nickel matte (LGNM) production from MBMA’s rotary kiln electric furnaces (RKEF) smelters fell 6.1% quarter-on-quarter to 20,557 tonnes. High-grade nickel matte (HGNM) output dropped by 3.2% to 12,979 tonnes of nickel.

Despite these quarterly dips, the company maintained its 2024 production guidance at 50,000-55,000 tonnes of HGNM and 80,000-85,000 tonnes of NPI.

Strategic Investments and Growth Plans

MBMA's long-term strategy focuses on bolstering output through strategic investments and partnerships. The SCM mine supplies saprolite ore to MBMA’s RKEF smelters and limonite ore to Huayue Nickel Cobalt’s HPAL plants. A second feed preparation plant (FPP), slated for commissioning by mid-2025, is expected to increase limonite ore processing capacity to over 9 million wmt annually.

The company collaborates with leading battery manufacturers to support its limonite production, targeting over 300,000 tonnes per year of nickel in mixed hydroxide precipitate (MHP). Key partnerships include:

• Green Eco-Manufacture (GEM): Joint development of PT ESG and PT Meiming HPAL plants with capacities of 30,000 t/yr and 25,000 t/yr of nickel in MHP, respectively.
• Brunp: Partnership with the subsidiary of Contemporary Amperex Technology (CATL) to establish a 60,000 t/yr HPAL plant for nickel in MHP.

Outlook for 2024 and Beyond

The company’s production guidance for 2024 remains robust, with saprolite ore projected at 4–5 million wmt and limonite ore at 9.5–10.5 million wmt. With the new FPP in operation by 2025, MBMA aims to significantly scale up production and maintain its competitive edge in the rapidly growing battery materials market.

As global demand for nickel intensifies, MBMA's strategic expansions and partnerships position it as a key player in the supply chain for electric vehicle batteries and renewable technologies.