Trinitan Green Energy Metals, an Indonesian producer of nickel and other battery materials, has spent the last few years lining up all the pieces to get its product into the U.S. supply chain.
Ian Fay, TGEM’s CEO-designate, has been setting up the company for this goal since he was hired as head of corporate development in 2022. In an interview with Latitude Media, Fay described becoming an importer of MHP, an intermediate product predominantly used in EV lithium-ion batteries, to the U.S. as the company’s “primary strategic objective.”
This work was already underway, but opportunity has been made more significant by the GOP’s July budget legislation, which imposed “foreign entity of concern” rules restricting eligibility for certain clean energy tax credits. The new restrictions will apply to a huge range of companies with both direct and indirect links to China, North Korea, and Iran — leaving Indonesia in the clear. (The rules, however, still remain vague; it was expected that the Trump administration’s FEOC guidance would be released last week, but the industry is still waiting.)
TGEM, which was established in 2020 as a spin-out of energy storage solutions conglomerate Trinitan Group, specializes in producing MHP using a proprietary technology that it claims is more environmentally friendly and less capital-intensive than the one that has long been the industry norm.
This technology, paired with the company’s intentional insulation from Chinese manufacturers to avoid FEOC problems, makes Fay bullish about TGEM’s prospects — even in an uncertain market plagued by the oversupply of nickel and worries about a decrease in U.S. electric vehicle adoption in light of policy shifts. In fact, the company is in the middle of an ongoing diligence process with the U.S. Development Finance Institution for a $90 million debt facility for the development of its first scaled plant in West Java.
Greener and smaller
TGEM’s STAL technology, for step temperature acid leach, processes nickel ore under atmospheric pressure using a gradual temperature increase and sulfuric acid. The more traditional HPAL plants, in contrast, need high heat and pressure to dissolve metal from ore. Because the HPAL process is capital- and energy-intensive, it generally only makes economic sense in large plants and with high-quality nickel; TGEM’s pitch is that the STAL technology allows them to handle lower-grade ores, and build smaller plants as well.
The quality and size requirements of HPAL plants mean that there are only so many mines in Indonesia fit for the purpose. According to TGEM estimates, of the around 300 nickel concessions in Indonesia, only a handful have the footprint and qualities necessary to build an HPAL facility. And the vast majority of those existing facilities “are, directly or indirectly, Chinese-controlled,” Fay said.
As a result, the MHP coming out of those plants will not comply with new FEOC regulations, which restrict companies from receiving U.S. tax credits if part of their product comes from entities with direct and indirect links to countries like China, North Korea, and Iran. In contrast, thanks to its small, modular plants, TGEM can enter contracts with small and mid-sized Indonesian mines that would not work for HPAL plants, making sure their ownership meets FEOC’s regulations.
TGEM’s plants can be built by clustering individual modules, each with a capacity of 2,750 tons of nickel and 12,000 tons of MHP per year.
“We are scaling our production capability for those units so that we stamp them out,” Fay said. “You get really good at low-cost production system design and you create clusters of units.” TGEM’s largest under-development project in West Papua, for example, is expected to include up to 40 modules, with a yearly nickel output of 25,000 tons, scalable to 100,000, the equivalent of 400,000 tons of MHP annually.
“Many institutional clients like that [modular] flexibility,” Fay said. “For our big facility, based on their [MHP] offtake needs, they could finance a cluster of three to six units, which we would build and operate.”
Another problem with HPAL nickel processing is that it produces a lot of waste, which, alongside reports of deforestation, coal pollution, and worker deaths, has contributed to recent increased scrutiny of the Indonesian nickel industry.
Andrew Mitchell, director of nickel research for Wood Mackenzie, says that waste is actually one of its biggest issues. “With HPAL, you generate 1.4 to 1.6 tons of waste for every ton you process, and you’ve got to stick that somewhere, and that’s an awful lot of waste,” he said. “They have to dry stack it, and in a high rainfall area that is seismically active, that is not without its risks.”
That’s something that TGEM claims to have solved. Through its STAL technology, the company is able to extract other materials from the laterite ore — including iron, magnesium, and aluminum — and turn them into potential revenue-generating products, such as magnesium hydroxide for fertilizers and iron oxide for steel.
Challenges ahead
As promising as TGEM’s strategy sounds, it’s not an easy time for nickel companies.
“The global demand outlook for nickel has shifted significantly and is less promising than before,” Mitchell said, noting that the change is due both to recent policy changes under the Trump administration, which have reduced the outlook for EV adoption and electrification in general, and to nickel-free LFP batteries becoming more dominant.
An important part of TGEM’s strategy lies in its ability to produce “green” nickel.
“In the current oversupplied market, it’s doubtful that companies would be willing to pay extra for a product that is ‘greener,’” Mitchell said; he added, however, that “some might be willing to pay extra for a product that helps them comply with FEOC regulations.”
Plus, with many of the Inflation Reduction Act’s clean energy incentives removed or reduced by the GOP since Trump took office, targeting the U.S. market has become harder, especially considering the country currently lacks plants to process MHP.
And the uncertain tariff outlook makes things even more complicated. At the moment, the U.S. has put a 19% blanket tariff on Indonesia, but Fay hopes the two countries will negotiate carve-outs for Indonesia’s biggest trade items, including nickel.
Still, Fay is optimistic. While the EV industry has so far been the main offtaker of MHP, the product can “feed the battery world” more broadly, including energy storage systems; and high-purity nickel can also be used in electronics and the defense industry.
The market’s demand for the company’s FEOC-compliant nickel is “increasingly urgent,” he said. So in the short term, TGEM is both working to ship MHP to U.S.-headquartered companies, and considering partnering with some of them to develop facilities to process it in Indonesia. In the next three years, Fay’s ultimate goal is to introduce TGEM to the U.S. capital markets; he is also considering a potential IPO.
