HPAL (High-Pressure Acid Leaching, nickel)

What it is

HPAL is a hydrometallurgical process that dissolves nickel and cobalt from low-grade laterite limonite ore by mixing a crushed-ore slurry with concentrated sulphuric acid in pressurised autoclaves above 240 degrees Celsius. The output is precipitated as mixed hydroxide precipitate (MHP), the primary battery-grade intermediate feeding NMC and NCA cathode manufacturers. HPAL is the only commercial route from laterite limonite, which constitutes the majority of Indonesia's nickel endowment, to battery-grade product. Key operators are concentrated in Indonesia's Central Sulawesi and North Maluku provinces: QMB New Energy Materials (a Tsingshan, GEM, CATL, and Hanwa joint venture), Huayou Cobalt's Huafei facility at the Indonesia Weda Bay Industrial Park (IWIP), Huayue Nickel Cobalt (HNC) at the Indonesia Morowali Industrial Park (IMIP), and PT Halmahera Persada Lygend at Weda Bay. Sulphuric acid is consumed at roughly 40 to 50 tonnes per tonne of nickel recovered; Indonesia imports most of its supply.

History

HPAL was commercially pioneered in the late 1990s at Murrin Murrin and Bulong in Western Australia and Moa Bay in Cuba, but those projects suffered cost overruns reaching up to US$100,000 per annual tonne of nickel capacity. Chinese engineering firms, led by China ENFI Engineering Corporation, restructured the economics: Indonesian plants built after 2020 cost US$30,000 to US$35,000 per annual tonne and commissioned in 12 to 18 months, versus five or more years in Western projects. Indonesia's January 2020 ore-export ban, enforced by Indonesian President Joko Widodo two years ahead of the original 2022 deadline, channelled approximately US$30 billion of Chinese capital into the sector. Indonesia's first operational HPAL plant, PT Halmahera Persada Lygend (Ningbo Lygend and Indonesia's Harita Group), commissioned at Weda Bay, North Maluku in May 2021. QMB New Energy Materials and Huayue Nickel Cobalt at Morowali followed in late 2021. By 2023, three plants held over 160,000 tonnes per year of nickel-in-MHP capacity, with seven more in development.

Current state

As of mid-2026, Indonesia's operating HPAL MHP capacity is near 355,000 tonnes per year, with Argus projecting capacity to approach 862,000 tonnes per year by end-2026. Utilisation has fallen to 70 to 75%, down from approximately 90% in 2025. Indonesia's Ministry of Energy and Mineral Resources cut the 2026 RKAB nickel ore quota by 30% to 270 million wet metric tonnes, tightening limonite feedstock. Sulphuric acid import costs rose from approximately US$150 per tonne in 2024 to near US$1,000 per tonne in early 2026, driven by the closure of the Strait of Hormuz and a Chinese export restriction. Indonesian ore grades falling below 1.5% nickel require more acid per unit recovered, amplifying the cost spike. Huayou Cobalt cut Indonesian output in response. Merdeka Battery Materials (MBMA) and Huayue Nickel Cobalt are building a new 90,000-tonne-per-year plant at IMIP, Morowali. Nickel Industries' Excelsior Nickel Cobalt (ENC) plant at IMIP, budgeted at US$2.3 billion, will be Indonesia's first HPAL facility producing MHP, nickel sulphate, and nickel cathode.

Relationships

HPAL is the critical link between Indonesia's laterite reserves and global EV battery supply. MHP flows primarily to Chinese cathode manufacturers and then to CATL, LG Energy Solution, and their automotive customers. The 2026 RKAB ceiling is the principal upstream feedstock constraint; إندونيسيا تخفض حصة تعدين النيكل 30% وترفع تكاليف الكبريت في مصانع HPAL بنسبة 567% documents the acid and utilisation pressures. Chinese capital, roughly US$30 billion invested in Indonesia's nickel sector, dominates plant ownership. The US Inflation Reduction Act's foreign entity of concern (FEOC) rules create a structural barrier to Indonesian MHP entering North American supply chains, since most plants are majority-controlled by Chinese entities. Indonesia Battery Corporation, incorporating Indonesian state miners Antam and MIND ID, is Jakarta's vehicle for building government equity in the chain.

What to watch

The size of Indonesia's mid-year supplementary RKAB allocation will determine whether HPAL plants recover adequate feedstock before year-end. Sulphuric acid costs depend on the Hormuz and Chinese export situations, with no major domestic acid plant commissioned inside Indonesia. ENC's commissioning timeline will test whether Indonesian HPAL can produce Class I nickel cathode at competitive cost. FEOC negotiations between the US and Indonesia, which could open IRA manufacturing credits to Indonesian MHP, are the key policy variable for Western EV automakers. A sustained shift toward lithium iron phosphate battery chemistry, which requires no nickel, would compress MHP prices and threaten project returns across the sector.