China Harnesses Tricky Technology To Unlock Trove of Battery Metals

"Six years ago, Chinese engineers set out on a risky path to turn trash into treasure.

Their target was the vast quantities of ore containing nickel and cobalt that blanket Indonesia's distant islands but are of such low grade that they were treated as little more than waste. If the engineers could figure out how to process it, they would unlock a new source of not one but two minerals the world needs for electric-vehicle batteries.

The main method long known to process this type of nickel, called High Pressure Acid Leach, or HPAL, was notoriously tricky. Western companies had tried to make it work but suffered high rates of failure. Scorching temperatures and enormous pressure involved in the process damaged equipment, requiring lengthy repairs. It generated vast amounts of acidic waste that is difficult to dispose of.

Attempts to design solutions often just created more problems.

Three Australian projects struggled in the 2000s, unable to reach capacity before their owners ended up in dire financial straits. Western miners poured billions of dollars into a facility in New Caledonia that didn't work as intended and was ultimately sold off.

In a remote forested area of Papua New Guinea, a state-owned Chinese engineering company, China ENFI, spent years working out the kinks. At first, the facility had all the hallmarks of an HPAL bust. In its second year of operation in 2013, it produced at roughly 40% of capacity. In 2016 a pipe burst, killing a worker and causing the plant to shut down for 78 days.

But ENFI's parent company, a state-owned miner, had deep pockets and bet that with enough time, it could get the plant working. By 2017, it had and was hitting design capacity.

"A five-to-six-year ramp-up would have crippled any Western company, which is why many HPAL projects are on their second owners -- or gone," said Lyle Trytten, a Canadian nickel-industry consultant who has been an engineer on HPAL projects around the world.

The Papua New Guinea plant marked a big shift from the early 2000s. Back then, Chinese nickel know-how lagged behind the West in key areas. Chinese companies had little experience using acid to process ores at over 350 degrees. It was around then that China ENFI established a research unit to catch up.

Its eventual success in Papua New Guinea meant that hundreds of Chinese engineers and technicians knew how to build and operate a thriving HPAL plant. Still, it wasn't a given that they would be able to duplicate the success in Indonesia. Many analysts predicted they would encounter the same roadblocks and frequent breakdowns as Western plants had around the world.

A private Chinese company, Lygend Resources and Technology, plowed ahead and hired ENFI. They began preparing land for construction in eastern Indonesia's Obi Island in December 2018, even before the detailed engineering design was finalized for the plant, according to a person familiar with the project. 

Experienced Chinese engineers flew to the site, which offered few amenities other than cold-water showers and bunk beds.

"Chinese engineers have a different attitude toward life and work," said Wang Duodong, Lygend's chief engineer. "In order to do their job well, they are willing to spend a lot of time working in such remote construction sites."

They tweaked the process where needed, such as switching to a cheaper type of titanium. They used a technique to reduce the moisture level of the final nickel product to improve efficiency, said Wang. Lygend hunted down Chinese companies that could make cheaper versions of Western equipment.

At the time, companies from Japan and the West were taking a cautious stance, concerned about costs and potential environmental damage. At the Chinese-run plant in Papua New Guinea, a pump failure in 2019 caused mineral slurry to overflow a tank into nearby waters, providing a glimpse of the risks.

That didn't appear to slow the Indonesian project, which was a partnership between Lygend and Harita, an Indonesian nickel miner.

By 2021, the first two production lines were up and running at full capacity.

Wang said their focus was to keep the plant design simple and streamlined, and to automate as much as possible to reduce errors, he said. They studied the Western projects that hadn't worked. "We actually learned from these failed projects, analyzed their disadvantages," said Wang.

A wave of Chinese-run facilities followed. Today, there are at least four such HPAL plants that are operational across Indonesia, with three more projects expected by the end of next year.

Western miners say Chinese companies gain unfair advantages from access to cheap government loans and because they pay scant regard to labor rights and the environment. In Indonesia, Chinese companies have built numerous coal plants to power their nickel rush -- expanding the use of a dirty fossil fuel the South is trying to cut back on, and the West pretends that it is trying too.

There has been a spate of deadly accidents, including an explosion at a Chinese nickel smelter on Indonesia's Sulawesi Island that killed at least 19 workers in December.

But many Western miners and analysts also say that Chinese mineral companies had a critical breakthrough with HPAL and are good at processing minerals." [1]

1. China Harnesses Tricky Technology To Unlock Trove of Battery Metals. Emont, Jon.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2024: B.1.