Six years ago, a group of Chinese engineers took on a daring challenge: turning what others saw as useless waste into something valuable. Their target was the large amounts of low-grade nickel and cobalt ore found on remote Indonesian islands. These ores were previously considered too poor in quality to be worth much. But if these engineers could figure out how to process them, they could unlock a new source of crucial minerals needed for electric-vehicle batteries.
The method they aimed to perfect was called High Pressure Acid Leach (HPAL). This process had a terrible reputation. Western companies had tried and failed repeatedly because it involved extremely high temperatures and pressure that damaged equipment and created a lot of toxic waste. Many projects ended up as expensive failures, with some even jokingly named after their problems—like “Murrin Murrin,” which was said to have to be built twice.
But the Chinese engineers were not laughing. They were determined to succeed where others had failed. In Papua New Guinea, a Chinese company named China ENFI set up a plant to tackle this challenging process. The beginning was rough. The plant produced only 40% of its intended output in the second year of operation and faced a serious accident in 2016, causing a 78-day shutdown. However, ENFI’s parent company was well-funded and committed to seeing this project through.
By 2017, the plant had finally reached its production goals. This success marked a significant shift for Chinese nickel processing. While Western companies had struggled with HPAL, Chinese engineers were learning and improving the process.
With their newfound expertise, the Chinese team turned their sights on Indonesia. A private Chinese company called Lygend Resources and Technology hired ENFI to help build a new plant on Obi Island. They started preparing the land in late 2018, even before all the engineering plans were complete. The engineers lived in basic conditions with just cold-water showers and bunk beds, but they were determined to succeed.
They made several improvements to the process, like using cheaper materials and reducing moisture in the final product. They also sourced affordable equipment from Chinese manufacturers and carefully studied the failures of Western projects to avoid repeating their mistakes.
Despite concerns from Western companies about costs and environmental impact, the Indonesian project progressed rapidly. By 2021, the plant was operating at full capacity with two production lines.
This success in Indonesia led to a wave of similar projects. Today, there are at least four operational HPAL plants across Indonesia, with more on the way.
Western miners argue that Chinese companies have unfair advantages, such as cheaper loans and less regard for labor rights and the environment. There have been accidents and environmental issues, including a tragic explosion in Indonesia that killed 19 workers.
Nevertheless, many agree that Chinese companies have made a critical breakthrough with HPAL technology. They have reshaped the global nickel market, significantly increasing their share of the global supply and driving down prices. This surge in cheap nickel has forced many Western mines to close or reduce operations.
China’s success in nickel mining has not only changed the industry but has also shown how persistence and innovation can turn what was once considered waste into a highly valuable resource.
