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Kamis, 27 Juni 2024

BASF’s Withdrawal from the Sonic Bay Project Does Not Diminish Interest in Indonesia’s Downstream Investments

Jakarta, June 27, 2024 – Following the official statement released by BASF on Monday (June 24) regarding the cancellation of its nickel refining investment plan with Eramet for the Sonic Bay Project in North Maluku, the Ministry of Investment and Downstream Industry/BKPM assured that this decision has been acknowledged by the Indonesian Government and does not diminish foreign investors' interest in Indonesia’s downstream sector.

BASF and Eramet, operating under PT Eramet Halmahera Nickel (PT EHN), had planned to develop the USD 2.6 billion Sonic Bay Project in the Weda Bay Industrial Park, North Maluku. The project involved the construction of a nickel refinery using High-Pressure Acid Leach (HPAL) technology to produce Mixed Hydroxide Precipitates (MHP). Deputy for Investment Promotion at the Ministry of Investment and Downstream Industry/BKPM, Nurul Ichwan, stated that BASF and Eramet’s decision to cancel the project was a business decision made after extensive evaluation.


“We have been closely monitoring this investment plan from the beginning. However, during the process, the companies shifted their focus, which ultimately led to the business decision to cancel the Sonic Bay Project,” Nurul explained.

According to the company’s release, BASF and Eramet’s decision to withdraw was influenced by significant changes in the nickel market, particularly concerning the choice of nickel as a raw material for electric vehicle (EV) batteries. BASF determined that there was no longer a need to invest in the supply of EV battery materials.


“We believe that the downstreaming of the EV battery ecosystem remains highly promising in Indonesia. Recently, Indonesia ranked 27th in the World Competitiveness Ranking (WCR) 2024, placing it among the top three in ASEAN,” Nurul added.


Interest from foreign investors in the downstream sector remains strong, with several projects already reaching the realization stage. For instance, PT Freeport Indonesia’s copper smelter, the largest in the world, officially began operations in Gresik, East Java, on June 27, 2024. Another milestone includes the first mass production of EV batteries in Indonesia by PT Hyundai LG Indonesia (HLI) Green Power in Karawang, West Java, starting in July 2024. The inauguration will be officiated by President Joko Widodo.


For further information, please contact:

R. Leidy Novanda

Senior Public Relations Officer

Communications and Information Services Bureau

Ministry of Investment and Downstream Industry/BKPM

E-mail: humas@bkpm.go.id

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