(Reuters) - Ford Motor Co. will take a direct stake in an under-construction battery nickel plant in Indonesia, a move that will deepen Ford's role in the country's supply chain as the automaker struggles to acquire materials for electric vehicles, the foreign media learnt on 5 December.

The U.S. automaker is investing with Vale Indonesia and China's Zhejiang Huayou Cobalt Co. to produce 120,000 tonnes a year of nickel chemicals for electric vehicle batteries, according to a joint statement from the two companies. The Pomala plant is expected to start commercial production in 2026, with a total investment of Rp67.5 trillion ($4.5 billion).

Global automakers are racing to secure long-term supplies of materials such as lithium, cobalt and nickel as demand swells. While direct investment in mines or refineries remains rare, General Motors Co. has invested in a U.S. lithium miner and Tesla Inc. is interested in buying a lithium producer.

Indonesia is becoming a major source of nickel for batteries after a wave of refinery investments (mainly by Chinese companies) in mineral-rich Indonesia. Ford, which plans to produce two million electric cars a year by the end of 2026, has struck a deal with Huayu to use battery material from its Pomala plant.

Lisa Drake, Ford's vice president of industrialisation for the Model e electric vehicle, said in a statement, "This framework gives Ford direct control over the source of the nickel we need, which is one of the lowest-cost ways to do so in the industry, and allows us to ensure that nickel is mined in line with our company's sustainability goals."

Pomalaa is a long-delayed project and an example of an early attempt to produce nickel chemicals from low-grade ore using 'high-pressure acid leaching' (HPAL) technology. A number of HPAL plants are currently under construction in the Southeast Asian country, but concerns remain about their environmental credentials.

[Source - CKNEF].