Indonesian Coal Miner Harum Energy Buys Stake in Nickel Plant

Eddie Spence, Bloomberg News

A dump truck travels along an access road at a nickel mine operated by PT Citra Sejahtera Persada in Morowali Regency, Central Sulawesi, Indonesia, on Thursday, March 17, 2022. Indonesia, the world’s top nickel producer, will raise production capacity of the metal after prices soared past $100,000 a ton, while the coal market is unlikely to get similar relief. Photographer: Dimas Ardian/Bloomberg , Bloomberg

(Bloomberg) -- PT Harum Energy has bought a controlling stake in a nickel processing plant, part of a trend of Indonesian coal miners moving into metals vital to the energy transition.

The miner acquired 51% of PT Blue Sparking Energy by converting part of a loan to the company into equity, according to a stock exchange filing. The nickel refiner issued new shares worth around $206 million for the swap.

Blue Sparking is developing a high pressure acid leach plant at an industrial park in Weda Bay in North Maluku province, which makes a lower carbon form of nickel coveted by electric vehicle manufacturers.

It’s the latest move by Harum into battery metals, after it raised its stake in Westrong Metal Industry, which operates a nickel smelter in Weda Bay, in January.

Indonesian coal miners are increasingly seeking to use their earnings from the fossil fuel to future-proof their businesses as the energy transition gains traction. PT Adaro Energy Indonesia has been building an aluminum smelter in Kalimantan, while PT Indika Energy and PT United Tractors bought stakes in non-coal mining assets last year.

--With assistance from Norman Harsono.