LX International Corp., the trading unit of South Korea’s LX Group, said on Tuesday it is slated to acquire a 60% stake in Indonesian miner PT Adhi Kartiko Pratama (AKP) at 132.9 billion won ($101.3 million) to produce nickel, a core material for electric batteries.
PT AKP’s mines on Sulawesi Island, Indonesia, have proven mineable nickel estimated at about 36 million tons, which can be used for 7 million electric vehicles, LX International said in a press release on Nov. 7.
“PT AKP’s mines have great infrastructure such as a haul road, a pit and a port. The location is also great – the mines are near the nickel industrial complex on the island,” an LX International official said.
The trading company is planning to complete the transaction by Feb. 29, 2024, and raise the Indonesian firm’s annual nickel production capacity from its current 1.5 million tons to 3.7 million tons by 2028.
LX International will continue to secure nickel and shift its major natural resource business from coal to EV battery minerals, an official from the trading firm said.
Meanwhile, LX International’s third-quarter operating profit reached 63.6 billion won on a consolidated basis, dropping 76.7% from a year earlier, according to its preliminary report on Tuesday.
Its third-quarter revenue fell 22.3% on-year to 3.66 trillion won, while the quarterly net profit plunged 80.2% from a year earlier to 49 billion won.
“The natural resource market boomed and logistics freight fares significantly rose last year. As they are on a downtrend this year amid the global economic slowdown, the base effect will occur in the third-quarter earnings,” an LX International official said.
The company forecasts fourth-quarter results to show improvement, with more energy use in the winter season and recovery of air freight demand.
LX International is investing the profits from its traditional businesses, such as coal and palm oil supplies, in future growth drivers such as EV battery materials, the company added.