A process for producing a cobalt III encapsulated nickel hydroxide or basic nickel carbonate product including the steps of: (i) providing an ammoniacal solution including cobalt ammine complexes and nickel II ammine complexes; (ii) progressively lowering the ammonia content to sequentially precipate the nickel as an hydroxide or basic carbonate; and (iii) further lowering the ammonia content to precipitate the majority of the cobalt as cobalt III oxide hydroxide; wherein the majority of cobalt III oxide hydroxide coats on the surface of the precipitate nickel hydroxide or basic nickel carbonate to form a coated particle.