Tsingshan plans nickel smelter in Indonesia powered by renewables

World’s top nickel and stainless steel maker plans to build solar and wind facilities to power a 2,000MW smelter in eastern Indonesia within the next three to five years

by Tim Daiss

Chinese steel and nickel producer Tsingshan Holding Group, the world’s top nickel and stainless steel maker, plans to build a 2,000-megawatt ‘clean-energy’ facility in Indonesia within the next three to five years, while laying the groundwork for further green development, the Wenzhou-based company said last week.

It will build solar and wind power stations needed for the plant. As well as supporting facilities at its Tsingshan and Weda Bay industrial parks in Indonesia.

The plant will supply power for the company’s production of raw materials used in batteries for electric vehicles (EVs). Tsingshan wants its battery-materials operations to have net-zero carbon emissions. It already holds investments in Indonesia for battery-grade nickel chemicals production. It has been trying to expand its footprint in the new energy sector.

Earlier this year, the firm unveiled plans to make battery-grade nickel from material reserved for stainless steel. However, that process usually uses smelters that consume large amounts of coal for power generation. It is making Tuesday’s announcement even more important.

Tsingshan also announced plans to supply nickel matte. It is a main feedstock to produce nickel sulphate, to domestic cobalt smelter Huayou Cobalt and new energy materials producer CNGR. Last July, the group started trial nickel matte production with more than 75% content of the metal to meet increasing EV battery demand.

Chinese firms like Tsingshan have been stepping up their focus on EVs in China, the world’s largest car market, as Beijing promotes greener vehicles to help reduce high air pollution levels, particularly in its major urban centres.


EV car manufacturers, however, have been caught in a seemingly Catch-22 situation over its need for nickel. On the one hand, they need more nickel production for EV batteries. They also need to address the carbon footprint coming from production of the metal. 

Tesla Motors founder Elon Musk last July pressed miners to produce more nickel. The cost of batteries remained a large hurdle for the company’s growth. However, he is also pushing for cleaner nickel production at the same time. A call that some in the industry say may still be hard to come by.

“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Musk said on a post-earnings call at the time. Tesla needs more nickel supply to support not only its increased auto manufacturing numbers. They also need it for larger vehicles and trucks.

While some analysts say that nickel is still in abundant supply, others claim supply could be stretched by the end of the decade. Nickel demand is expected to increase from 2.2 million metric tons to somewhere in the range of 3.5 million to 4 million metric tons by 2030.

“The current challenge is to nearly double supply while meeting environmental, social, and corporate governance (ESG) requirements.”

Nickel is crucial for EV battery efficiency. It makes batteries energy dense so cars can run further on just a single charge. It’s now widely viewed to be the second most expensive component of EV batteries. EVs, for their part, will comprise 58% of global passenger car sales in 2040. Compared with 10% by 2025, according to a Bloomberg NEF report.


Indonesia passed the Philippines in 2018 to become the world’s largest nickel producer and could soon pass Canada and Australia combined. 

Indonesia had 13 operating nickel smelters with an input capacity of 24.52Mt by the start of 2020. And another 22 nickel mines are under development, government data shows, while Jakarta is trying to boost the sector. Indonesia holds about a quarter of all global nickel reserves. 

Meanwhile, several junior miners, such as Vancouver-based Giga Metals Corp and Canada Nickel Co are also planning to produce more environmentally friendly nickel. However, that may still not be enough ‘clean’ producers of nickel for EV makers in the long-term.

China turns to innovation as rare earth boom

The high demand for magnetic materials from makers of appliances and electric vehicles has helped drive a multi-faceted recovery for the sector, causing a rise in prices for rare earth – and enabling rare earth companies to undertake more research and development

 By Chris Gill

ATF) On Monday (March 1), a Ministry of Industry and Information Technology official publicly explained the phenomenon of China’s “rare earths being sold at the price of cabbages.” He also noted bluntly that Japan is worth studying to learn how to develop high-end rare earths, as their neighbour dominates the technologies for them. And that, China’s Science and Technology Daily said, is obvious to all in the industry.

Chairman Mao once famously said “seek truth from facts” due to historical reasons and other factors. And there is indeed a gap between China’s rare earth industry and developed countries, the paper noted. It said the gap is becoming more of a driving force, prompting China’s rare earth sector to continue to catch up and progress.

In Baotou, the paper said it saw a continuous vacuum casting furnace made by Showa Denko, and rented from Japan by Jinmenghui Magnetics company. “After introducing this production equipment, we have innovated again. In addition to the cooling process of the castings, the castings currently produced by the company are the best castings for processing neodymium iron boron magnets in the industry,” Sun Xiping, the person in charge of the company, said.

Development of the industry is advancing

China’s Rare Earth Industry Prosperity Index Report, compiled by the Xinhua Index division at China’s Economic Information Service, says in the fourth quarter of last year China’s rare earth industry rated 109.26 points, which is high. Six sub-indices on market performance, production and operation, employee status, inventory status, financing status and technological innovation are all above the prosperity line and in the “prosperity” range.

“In the sub-indices, the market performance scored the highest at 120.27 points. From the supply side, the domestic rare earth industry integration ended, Myanmar’s mixed rare earth carbonate imports fell, and the overall tight supply supported price increases.

“The high demand is for magnetic materials, and the multi-faceted recovery in demand has promoted the rise of rare earth prices,” according to analyst Huang Rong, who said Rare Earth Products Exchange, the increase in the proportion of domestic home appliances such as inverter air conditioners has promoted a rise in demand for magnetic materials, while the global new energy vehicles (NEV) will help maintain a high growth rate.

Technical innovation index

Those factors will drive a growth in demand for high-performance NdFeB. Mid-to-high-end magnetic material companies have fully resumed work and production. They continue to expand. Demand for replenishment has brought a linked increase in the price of light and heavy rare earths.

In addition, the technical innovation index was put at 108.11 points, which was also in the “prosperity” range. Compared with the third quarter, the score of this index rose by 2.23 points, an increase of 2.1%. Technological innovation indicators mainly investigate how companies expect to invest in science and technology research and development the first quarter of 2021.

According to Xinhua Index Division’s results, more than 70% of companies surveyed companies expect the first quarter of this year to have the same level of technological innovation as the last quarter of 2020. But 16% of them still expect to R&D investment will increase in this quarter, while 13.5% expect the number of R&D staff will also increase. More than half of these companies had patented technologies, and some had independently developed production equipment that accounted for more than 90% of all production equipment.

Rare earth technology innovation accumulates thinly

Yan Huizhong, a technical expert and senior engineer at Baotou Rare Earth Research Institute, said: “Regardless of innovation models, the key to transforming China’s rare earth resource advantages into economic gains lies in improving the level of rare earth applications. On the basis of continuing to play the role of promoting supply-side structural reforms, with the strength of the pulling effect of demand-side structural reforms, we strive to reach the downstream market and industry,” Yan said.

Their innovation aims to continuously expand the application of rare earths. And to stimulate the development of the rare earth industry with the demand of the domestic rare-earth value chain and manufacturing. China is hoping for a leap in development.

At present, the new high-capacity La-Y-Ni hydrogen storage material developed by Baotou Rare Earth Research Institute has an actual discharge capacity of 390 mAh/g. That exceeds the theoretical capacity of traditional LaNi5 hydrogen storage alloys and solves the problem of high-capacity La-Mg-.

The Ni-based hydrogen storage alloy is difficult to prepare. Coming up with a comprehensive performance to meet market demand and breakthrough foreign patent restrictions is a part of the effort.

Research and development

“We have independently developed a new generation of rare earth lanthanum, yttrium and nickel hydrogen storage materials, and have authorised invention patents in China, Japan, and the United States. We are stepping up efforts to develop industrial application technologies in response to market demand,” Yan Huizhong said.

The successful research and development of rare earth magnesium-nickel-based hydrogen storage alloy electrode materials also provides a variety of possibilities for the development of hydrogen storage materials. In 2017, a new rare earth hydrogen storage alloy production demonstration line with an annual output of 200 tonnes was completed at the Rare Earth Center.

“The production line completely relies on independent innovation and independent intellectual property rights in production technology. And, equipment and product design too. The product has been promoted and applied in many domestic power battery companies such as Corun, which has greatly promoted China’s high-tech industry, providing safety, easy recovery, technological progress and industrial competitiveness of water-based nickel-metal hydride power batteries.”

Steel for high-speed rail

The rapid development of domestic high-speed railways requires extremely high-end steel rails. The rare earth ferro-alloy additives they developed for rare earth steel have been tried out in domestic scientific research institutions and iron and steel enterprises. With good results, and the overall technology had reached the lead internationally.

In terms of medical treatments, Baotou Xibaobowei Medical System Co, has established an industry with an annual output of 100 magnetic resonance equipment in the research and development, production and service of rare earth permanent magnetic resonance imaging instruments. Chemical bases and large-scale R&D centres have continued to develop a variety of rare earth permanent magnetic resonance products with independent intellectual property rights that are suitable for popular use at the grassroots level, creating a national brand of large-scale medical equipment.

Yan Huizhong said the international division of labour in the industrial chain and globalisation of the economy was a major trend. Based on this, relying on innovation would gradually form a new development pattern with domestic and international cycles as the main body and mutual promotion of domestic and international cycles, and make better use of the international and domestic markets.

The rare earth industry could only achieve stronger and sustainable development with the blessing of science and technology.

Race is on for Indonesia’s untapped rare earths

Tin mining tailings could contain commercial quantities of rare earths both US and China would be keen to tap


JAKARTA – Rare earth, the experts like to say, is neither rare nor is it earth. But given its use in everything from smartphones to high-tech aerospace and defense systems, a potential buried treasure from the past may soon become the next big thing in Indonesian mining.

Indonesia appears to have only modest proven amounts of the v valuable minerals, but much of what it does have is locked away in the rock waste, or tailings, left over from centuries of tin mining on the islands of Bangka and Belitung, south of Singapore.

Although preliminary studies show state-owned PT Tambang Timah’s tin sands contain 13 of the 17 chemical elements in the periodic table present in rare earths, it will take further investigation to determine whether it is present in commercial quantities.

If it is, that would make Indonesia a player in an industry that is fast becoming a new trade war flashpoint between the United States and China because of its strategic significance for numerous civilian and military technologies, including both laser and precision-guided missiles.

China currently controls 80% of the world’s trade in rare earths and could conceivably  block US access in retaliation for any future Washington sanctions on Chinese-made goods.  

With proven reserves of 327,500 tons, Timah still produces about 30,000 tons of tin a year from an offshore-onshore concession covering 512,369 hectares; other private firms add 40,000 tons, making Indonesia the world’s largest tin producer. 

Rare earths also occur in Aceh, Jambi and Riau’s Singkep Island and in West Kalimantan, where they are associated with rich deposits of bauxite, the feedstock for a US$695 million alumina smelter the Chinese are building north of Pontianak, the province capital.

Historically, most rare earths have been produced as by-products from tin, copper and gold mining, but were not considered worth processing and have invariably ended up in stockpiles, as is the case with Tambang Timah.   

With the US distracted by internal problems, the only outside interest so far in Indonesia’s potential has inevitably come from China, which has 55 million tonnes of rare earth reserves, by far the largest in the world.

But in looking for investors elsewhere, such as the US and Australia, the government is anxious to develop domestic expertise in the complex seven-stage process of refining monazite and xenotime, the two minerals that house REE elements.

Where the US may have an edge over China is in handling radioactive thorium, which is released in the course of the processing and must be treated with extreme care, even if it doesn’t produce uranium’s dangerous gamma rays. 

Laboratory results indicate Timah’s tailings contain significant quantities of neodymium and praseodymium, which in combination with iron and boron are used to produce high-power magnets for electric motors and military guidance and control systems.

Indonesia already possesses 80% of the mineralsrare earths included, needed to manufacture lithium batteries, part of the government’s policy of venturing into electric vehicles as a way of creating a future industrial base built around its vast natural resources.

Neodymium is responsible for most rare earth demand, with a market value of $11.3 billion in 2017. Demand is currently outstripping supply by about 2-3,000 tons a year, but that gap will widen as more lithium battery-powered electric vehicles appear on the world’s roads.

Future prospects depend on the government enacting policy and regulation and in initiating incentives for downstream and upstream industry, according to Fadli Rahman, co-author of a 2014 Colorado School of Mines paper on Indonesia’s rare earth potential.

“If the Indonesian government remains passive and unassertive to the viable options, the rare earths will merely remain rare to Indonesians for the foreseeable future,” said Rahman, now state oil company Pertamina’s youngest commissioner.

With estimated reserves of only 13 million tons, the US is waking up to the fact that China’s domination of the increasingly strategic material leaves it vulnerable.

At one point, neodymium was even on the Donald Trump administration’s list of tariffs it placed on Chinese imports in 2018 before it was quietly removed, an indication of how important it has become to the US economy.

Last year, China threatened to strengthen controls on rare earth exports to the US, one of the reasons why Washington recently formalized an existing partnership with Australia to develop new sources of critical minerals, including rare earth, cobalt and tungsten.

Australia, with 2.1 million tons, is one of a handful of countries possessing significant rare earth reserves. Others include Brazil (22 million tons), Russia (19 million), Vietnam (11 million) and India (3.1 million).

Vietnam, whose rare earth concentrations are along its northwestern border with China and the South China Sea coast, is reportedly keen on using two relatively common elements, cerium and lanthanum, to develop a clean energy capacity.  

The US began mining rare earth at southern California’s Mountain Pass mine in the 1960s, but since 2010 China has become the dominant player, producing 100,000 tons a year compared with the US output of 43,000 tons over the past two decades. 

An open-pit mine close to the Nevada border known as Mountain Pass was recently saved from a second bankruptcy by MP Materials, a company owned by a Chicago hedge fund. It remains the only rare earth mining and processing facility in the US. 

Most rare earth projects have proven to be uneconomic because of mining costs which can contribute 25-39% of the total expenditure for extracting from hard rock deposits. But Bangka-Belitung’s Monazite has the advantage of being in sand form and therefore does not require crushing and grinding.

In the end, thorium and how to deal with it remains a major impediment to the development of monazite deposits.

Indonesian nuclear advocate Bob Effendi, the local representative for American nuclear reactor design company ThorCon, asserts that safety concerns around the stockpiling of the radioactive waste is a “non-issue.”

But local geologists say it will need to be contained in stainless steel casks and stored in reinforced concrete buildings, possibly on a small uninhabited island, until such time as it is needed as fuel for a long-planned nuclear power station.

For decades now, part of the International Atomic Energy Agency’s (IAEA) mission has been to simply monitor the volume of monazite in Tambang Timah’s tailings, as it has done with similar mine waste around the world. 

In the meantime, nuclear power remains on Indonesia’s agenda, initially set down in a 2007 long-term national development planning law that envisaged an operating plant by 2024. 

In 2014, the Ministry of Mines and Energy regulation listed nuclear in the same category as other sources of renewable energy, but with the proviso that it should only be considered as a final option.

A second ministerial regulation in 2019 called for the drawing up of a concrete plan for the construction of a nuclear power station, followed by a presidential regulation earlier this year which listed it as a priority program for advanced studies.

Bangka-Belitung governor Erzaldi Rosman Djohan sent a letter to the Coordinating Ministry of Maritime Resources and Investment on August 3 supporting the construction of the nuclear plant in the southern Sumatran province.

But the Indonesian citizenry may first have to get over their innate fear of nuclear power, which has so far stymied plans going back to the New Order era for a station to be built on the Muria Peninsula in heavily-populated Central Java.

A member of President Joko Widodo’s National Economic and Industry Committee (KEIN), Effendi argues that a thorium-fuelled plant is not only immune to meltdown but is cheaper to build and produces less waste.

The former oilman also challenges the widely-held perception that Indonesia has limitless sources of energy, noting that coal and gas reserves are not finite and claiming that solar and wind potential is only 15% of what it is claimed to be.

Indonesians are not alone in their fear of anything nuclear-related. In Malaysia, the government faces public opposition to the Lynas Corporation’s facility near Kuantan, which processes rare earth oxides shipped from its Mt Weld concentration plant in West Australia.

With more low-level radioactive waste piling up at the plant, and the issue heading for Malaysia’s High Court, Lynas has now been forced to move the cracking and leeching part of the process to the outback mining center of Kalgoorlie-Boulder.