In explaining its decision to terminate the study, it said the COVID-19 pandemic made permitting difficult and communication with partner PT Vale Indonesia, or PTVI, challenging.

The company began prefeasibility work with the two other companies on the proposed refinery in 2012 and has been conducting a definitive feasibility study since 2018.

“Under these circumstances, PTVI has started looking for an alternative to executing a joint promotion of the Pomalaa project with SMM, and SMM has been unable to progress with negotiations with PTVI,” SMM said.

“Because SMM finds it difficult to keep the internal and external project study team without any prospect for future progress, it has concluded that it has no choice but to discontinue the study,” it said.

SMM had intended to use the Pomalaa project in its strategy to secure nickel to achieve its longer term target of a nickel production rate of 150,000 mt/year.

“We deeply regret for such an outcome, however, we will continue to strive to acquire nickel resources to strengthen the integrated value chain of SMM’s three business segments (Mineral Resources, Smelting & Refining and Materials), and for stable supply of SMM’s nickel products, as we stated in our three-year business plan,” the company said.

It said the termination of the project would not have a material impact on its financial performance for the year ended March 31, 2022, or 2023.

SMM in July announced plans to invest Yen 47 billion ($367.5 million) to expand its capacity for producing cathode materials for the secondary batteries used in electric vehicles, through a new plant that will be erected in Niihama City, Japan, and the expansion of the Harima Refinery in Kako-gun in 2025.