German chemicals giant BASF and French miner Eramet have scrapped plans to build a joint nickel-cobalt refining complex in Weda Bay, Indonesia, Kallanish reports.

The companies said in separate statements the decision was reached after a thorough evaluation, including discussions about project execution strategy. They agreed to assess the potential $2.6 billion project in 2020.

Without addressing the reason behind the decision, Eramet says it remains focused on sustainably optimising the resource potential of its Weda Bay mine to supply ore to local nickel producers.

Group’s chief development officer, Geoff Streeton, adds the company will continue to investigate “opportunities to participate in the nickel electric vehicle battery value chain in Indonesia.” The country, he says, is poised to play a “pivotal” role in the future of the global nickel market.

BASF’s board member Anup Kothari explains that since the project’s inception, the global nickel market has changed significantly. “In particular, the supply options have evolved and with that BASF’s availability of battery-grade nickel. Consequently, BASF no longer sees the need to make such a substantial investment to ensure a resilient metals supply for its battery materials business,” he says.

The advanced cathode active materials (CAM) supplier has not ruled out sourcing “responsible and sustainable” raw materials from Indonesia in the future. Yet, it notes that its battery materials business has a “robust” network of partners to ensure a resilient supply of critical materials for the production of precursor CAM globally. It didn’t, however, expand on existing suppliers or whether the move reflects lower demand fundamentals.  

Weda Bay is considered the largest nickel mine in the world. Eramet says the mine, owned in partnership with China’s Tsingshan, sold 36.3 million wet tonnes last year.