Jakarta. Global carmaker Ford Motor Company has acquired an 8.5 percent stake in the Indonesian nickel mining firm, Kolaka Nickel Indonesia, for Rp 88.7 billion ($5.8 million) in a move to bolster its electric vehicle (EV) battery production.

Ford is aiming to hold direct control of raw material sources for EV battery production.

Kolaka Nickel is a joint venture between Vale Indonesia (INCO) and Singapore-based Huaqi. Following Ford's investment, Vale Indonesia and Huaqi now hold stakes of 18.3 percent and 73.2 percent, respectively.

Filia Alanda, corporate secretary of Vale Indonesia, said on Tuesday that Kolaka Nickel was established with an initial capital of Rp 3.8 trillion.

Ford's participation "constitutes a non-affiliated transaction and does not create any conflict of interest," added Filia.

Situated in the Pomalaa mining block in Southeast Sulawesi, Kolaka Nickel operates a high-pressure acid leach plant designed to extract nickel and cobalt from laterite ore bodies. This process produces mixed hydroxide precipitate (MHP), a lower-cost nickel product used in EV batteries with nickel-rich cathodes, with an estimated annual capacity of 120 kilotons.

The construction of the plant, which also involved investment from China-based Zhejiang Huayou Cobalt Co., commenced earlier this year and is slated for full operation by 2026.

The MHP output aims to support Ford's aspiration to manufacture 2 million EVs in the forthcoming years.

The Pomalaa Block has attracted a total investment of Rp 67.5 trillion and is anticipated to generate approximately 12,000 job opportunities. It has been designated as a national strategic project by the Indonesian government.

On March 30, Ford reached an agreement with Vale Indonesia and Zhejiang Huayou Cobalt Co. on a three-party collaboration to advance more sustainable nickel production in Indonesia and help make electric vehicle batteries more affordable.

All three companies are making equity investments in the Pomalaa Block High-Pressure Acid Leaching (HPAL) project through a definitive agreement signed at a ceremony featuring Indonesian President Joko Widodo.

The Pomalaa Block will process ore provided by Vale Indonesia from its Pomalaa Block mine to produce MHP. This HPAL plant will operate under Kolaka Nickel Indonesia in the Pomalaa Block nickel industrial area in Kolaka. 

Ford said earlier the collaboration will deliver materials essential for the auto industry’s shift to EVs, enhance Indonesia’s EV manufacturing industry and support Ford’s plan to deliver a 2 million EV production run rate by the end of 2026 and further scale over time.

“This framework gives Ford direct control to source the nickel we need -- in one of the industry’s lowest-cost ways -- and allows us to ensure the nickel is mined in line with our company’s sustainability targets, setting the right ESG standards as we scale,” Lisa Drake, vice president for Ford Model e EV industrialization, said in a statement. 

“Working this way puts Ford in a position to help make EVs more accessible for millions and to do it in a way that helps better protect people and the planet.”

Vale Indonesia CEO Febriany Eddy said at that time the global cooperation is “in line with Indonesia’s vision to build a domestic EV ecosystem and makes Vale an important contributor toward addressing the world’s decarbonization challenge."