Zhejiang Huayou Cobalt, one of the world's largest nickel producers, is exploring options for approximately US$2.7 billion in financing for its Ford Motor-backed project in Indonesia, according to sources familiar with the matter.

HSBC Holdings and Standard Chartered are arranging the loan and inviting other banks to participate in financing the Chinese company's battery-nickel facility in Southeast Sulawesi, the sources said, requesting anonymity as the information is private.

Huayou has partnered with Ford and miner Vale Indonesia on the project to produce battery-grade nickel for electric vehicles. Indonesia accounts for more than half of global nickel output and has been actively attracting foreign investment in its domestic processing industry over the past decade.

Huayou, HSBC, and Standard Chartered did not immediately respond to requests for comment.

The fundraising comes as benchmark nickel prices trade near a four-year low, amid weaker demand from the stainless steel market and slower-than-expected growth in the electric vehicle sector. The Pomalaa plant will use 'high-pressure acid leaching' (HPAL) technology to produce nickel chemicals, specifically mixed hydroxide precipitate, from low-grade ores.

It is expected to have an annual nickel output of 120,000 tones, making it one of the largest High Pressure Acid Leach (HPAL) projects in Southeast Asia.

The total investment for the project is expected to be about US$ 3.8 billion, Huayou said in a filing last December. Huayou holds a 73.2% stake, while Vale has 18.3%, and Ford holds an initial 8.5% stake, with the option to increase this to 17% within an agreed timeframe.

Huayou stated last year that construction of the Pomalaa plant would take approximately three years. It has not provided an updated timeline but mentioned earlier this year that preliminary work on the project has been completed.