Ecopro to become major shareholder in Indonesia's BNSI smelter project, securing 65,000 tons of nickel

Ecopro Group announced Tuesday it will join the construction project for the BNSI (Bahodopi Nickel Smelting Indonesia) smelter within the International Green Industrial Park (IGIP) as a major shareholder — the second phase of its nickel smelter investment in Indonesia.

Ecopro completed its Phase 1 investment at the IMIP complex in Indonesia over the past four years, securing 29,000 tons of nickel. Once the latest investment is finalized, the company will hold supply rights to a total of 65,000 tons of nickel based on its smelter investment stake.

The strategy is to use that supply to boost the price competitiveness of its NCM cathode materials and establish a dominant position in the global cathode material order market.

The BNSI smelter, under construction in Sulawesi, Indonesia, is being developed through a joint venture with global partners including PTVI (PT Vale Indonesia), a state-owned Indonesian mining company.

Ecopro and Ecopro BM plan to significantly increase their combined stake beyond the original plan, taking a 39 percent share as the major shareholder to lead the nickel smelting project. Total investment costs are estimated at around 1.5 trillion won ($973 million).

By securing majority shareholder status in BNSI, Ecopro Group aims to build a battery supply chain — covering nickel, precursors and cathode materials — that meets Non-Prohibited Foreign Entity (Non-PFE) requirements. The group also plans to leverage cost competitiveness in its NCM cathode materials through raw material internalization to gain a competitive edge in winning orders from global cell manufacturers and automakers.

To expand its share of the nickel market, Ecopro also plans to sharply increase BNSI's production capacity — from the originally planned 66,000 tons per year to 90,000 tons per year. That output is equivalent to enough battery material for about 2 million electric vehicles, surpassing South Korea's annual domestic car sales of roughly 1.7 million units. BNSI's annual sales are projected to average around 2.5 trillion won going forward.

To fund the second phase of the Indonesia project, Ecopro Group is turning to a rights offering by its key subsidiary, Ecopro BM. Ecopro BM said its board met Tuesday and approved a rights offering of 9,900,990 new common shares. The offering will proceed through a shareholder allocation followed by a public offering of any unsubscribed shares.

Proceeds from the rights offering are earmarked for the construction of the BNSI smelter in Indonesia and additional investment tied to the launch of mass production at its Hungary factory. Ecopro BM expects to raise a total of 1.2 trillion won through the offering: 915 billion won will go toward securing a stake in BNSI and completing remaining investment in its Hungarian unit, 135 billion won will cover operating costs including raw material purchases, and 150 billion won will be allocated to facility investment.

The shareholder subscription period runs Oct. 15–16, with the general public offering set for Oct. 20–21. New shares are scheduled to list on Nov. 5. The preliminary issue price is 121,200 won per share, with the final price to be confirmed on Oct. 12.

"This rights offering is a decisive move to preempt the global nickel market and strengthen our NCM competitiveness," Ecopro BM CEO Choi Moon-ho said. "We will combine Ecopro's unrivaled high-nickel technology with overwhelming cost competitiveness to firmly secure leadership in the global NCM battery market."

Meanwhile, Ecopro posted operating profit of 60.2 billion won in the first quarter, a 42-fold increase from the same period a year earlier, as a recovery in upstream industries such as semiconductors and electric vehicles, rising metal prices and the consolidation of the Indonesian smelter all fed into results. Sales rose about 2 percent over the same period to 822 billion won.