(Yicai Global) May 12 -- Chinese green energy firm GEM said it plans to jointly invest USD500 Million with two partners to build their second plant in Indonesia that will process nickel intermediate product as demand from electric vehicle makers surges.

GEM Wuxi Energy Materials, Indonesia’s Cahaya Jaya Investment, an arm of Indigo International Investment, and a Hong Kong-based unit of Zhejiang Weiming Environmental Protection will build a laterite nickel processing plant in Indonesia Morowali Industrial Park, its Shenzhen-based parent company said in a statement late yesterday.

The joint venture plant will produce 20,000 tons of nickel a year, GEM said, adding that there is intention to further extend the plant’s product scope downstream in the future and make ternary precursor and cathode materials for lithium-ion batteries.

GEM’s unit will own 51 percent of the JV, Cahaya Jaya 26 percent, and Weiming’s unit 18 percent, GEM said, noting that its local management team will own 3 percent and Weiming’s the remaining 2 percent.

Weiming announced last September that it would partner with GEM to build a nickel matte factory in Weda Bay Industrial Park on Indonesia’s Halmahera island for a total investment of USD448 million. Merit International Capital, another unit of Indigo, also joined the pair in the project.

High nickel matte is an intermediate product of nickel ore smelting that can be further processed to make high-purity nickel sulfate, a key raw material for ternary lithium battery cathode materials.

GEM’s shares [SHE: 002340] closed 1.8 percent down at CNY6.73 (97 US cents) today. Weiming [SHA: 603568] edged up 0.1 percent to CNY18.69 (USD2.69).

Editor: Futura Costaglione