LX International, the trading arm of South Korea's LX Group, said Tuesday it will buy a major stake in a nickel mine in Indonesia as it pushes to expand its resources business.
The company's board of directors has approved an agenda to invest 133 billion won ($101.6 million) to acquire a 60 percent stake in the Adhi Kartiko Pratama, or AKP, mine and secure its management rights.
The acquisition will be LX's first nickel mine investment in the Southeast Asian country.
Located near the Morowali Industrial Park on Sulawesi Island, the 20-square-kilometer mine has excellent location advantages with nickel refineries nearby and as an operating mine, it already has infrastructure such as mining roads, low mines and ports.
The mine's proven mineable resources amount to 36 million metric tons out of the total 51.4 million tons of ore reserves. The amount is equivalent to the resources needed for 7 million electric vehicles, according to LX International officials.
LX is set to finalize the takeover deal by paying the investment amount by the end of February next year. It looks to stabilize operations early through phased production increases with the goal to more than double the annual production volume of 1.5 million tons as of last year to 3.7 million tons by 2028.
LX will have the rights to the entire offtake volume produced at the mine.
Starting with this acquisition of nickel assets, LX is planning to continuously secure additional assets under consideration and shift the focus of its resources business from coal to key secondary battery minerals such as nickel.
"By actively utilizing our business experience accumulated over 40 years in Indonesia and our ability to successfully develop and operate existing coal mines, we'll strategically foster the secondary battery minerals and materials business," an LX International official said.