BEIJING/LONDON (Reuters) -Russia's Nornickel is in talks with several Chinese battery companies to build a plant jointly producing nickel material from Russian semi-finished products, three sources with knowledge of the matter said.

CNGR Advanced Material and Brunp Recycling, a subsidiary of Chinese battery giant CATL, are among the firms approached by Nornickel.

The metals giant is in the midst of trying to move significant amounts of production away from Russia to major consumer China, bidding to circumvent Western sanctions against Moscow over its war with Ukraine.

If the project advances, it would be the third such major initiative by Nornickel this year. It is in talks to move its copper smelting to China. The company also plans to build a platinum group metals refinery in Bahrain.

One source said Hunan province in southern China, where many Chinese battery-sector firms are based, is being considered as the main location for the project, although no final decision has been made.

The plant would produce nickel sulphate, a form of nickel used to make batteries for electric vehicles, from Russian nickel matte, a semi-finished product, another source said.

Nornickel is ready to supply 50,000 metric tons of nickel a year, about a quarter of its current annual production, to the future plant, the source added. The company produced 209,000 tons of nickel in 2023, 6% of global output.

Nornickel declined to comment.

In a statement on Friday, CATL international communications manager Fred Zhang said there are "no talks between Nornickel and CATL or any of our subsidiaries regarding a nickel plant."

CNGR denied in a statement on Wednesday having any talks with Nornickel about a nickel plant, or any interest on a joint investment with Nornickel.

Nornickel, a major producer of high-grade nickel, said in March that it would seek ways to integrate its nickel into the global battery sector as it reshuffles sales to ease the effect of sanctions against Russia on its own business.

It did not disclose further details at that time.

Until Russia was sanctioned by the West in 2022, Nornickel sold mainly refined Russia-made products.

However, sanctions against Moscow prompted some Western producers to avoid Russian metal and complicated payments, prompting Nornickel to try to transfer some final stages of its production outside Russia.

Two sources said the Chinese firms are wary of the risks around the sanctions backdrop and may not be willing to work with Nornickel due to exposure to the global export market - with a chance that Western buyers might turn down supplies if they have a direct connection to Russia.

The global nickel market is oversupplied with primary output estimated at 3.55 million tons this year, and China's battery industry often sources its nickel from top producer Indonesia, accounting for 42% of global primary supplies.

Nornickel's production will be a guaranteed source of long-term raw material for those Chinese firms who do not own nickel deposits in Indonesia, one source said.