The industry ministry had accept various investment commitments in the lithium battery projects in Indonesia - Photo by Industry Ministry Office

JAKARTA (TheInsiderStories) – The industry ministry had accept various investment commitments in the lithium battery projects in Indonesia. PT QMB New Energy Minerals has commit to invest US$700 million in Morowali, Central Sulawesi.

Then, PT Halmahera Persada Lygend also has committed to pouring out Rp14.8 trillion ($1.02 billion) of investment in Halmahera, North Maluku. While, PT International Chemical Industry disbursed Rp207.5 billion to produce as many as 25 million lithium ion cell batteries which are equivalent to 256 MWh per year.

“PT International Chemical Industry will begin to enter the commercial pre-production stage at the end of 2020 and begin to enter the stage commercial production in 2021,”  said director general at the ministry, Putu Juli Ardika in an official statement released on Wednesday (07/29).

Previously, South Korea’ Hyundai Motor Company affirmed a $2.8 billion investment in the development of electric vehicles in West Java, as the company seeks to make Indonesia its key export hub. Hyundai aims to start operations in 2022.

Masayoshi Son, the founder of Japanese technology investment giant Softbank, has met President Joko Widodo and pledged at least $2 billion to support online-based mobility solutions and the development of electric vehicles in Indonesia.

He continued, the government will continues to encourage the investment in the battery development for electric vehicles (EV). He said, Indonesia has the availability of natural resources like nickel and cobalt that can used to support the projects.

“For producing electric vehicle batteries, sufficient quantities of raw materials are needed at Indonesia, like nickel and cobalt. In addition, the electric vehicle industry has also begun to develop has a domestic market foundation to export potential,” said Ardika.

The government has formed a team to accelerate the involvement of the industry players to develop the lithium batteries such as state-owned enterprises namely PT Indonesia Asahan Inalum (MIND ID), PT Aneka Tambang Tbk (IDX: ANTM), PT Perusahaan Listrik Negara (PLN), and PT Pertamina.

“MIND Id and Antam will focus on raw material and refinery, while PLN and Pertamina will focus on the downstream sector, ” explained the director general.

President Joko Widodo has expressed his desired to make Indonesia become the second largest electric vehicle production center in Southeast Asia. He also wants the country have an electric car industry in Indonesia to reduce dependence on fossil energy.

The head of state has officially signed into effect a presidential regulation that will accelerate the development of EV in the archipelago. The regulation had been under discussion for more than a year as the president’ intent to pursue cleaner modes of transportation met with nationalistic resistance and demands for protection of local automakers.

Nickel, a metal that is a key ingredient in the production of lithium-ion batteries for the latest generation of EV, is in abundance in Indonesia, giving the country comparative advantage. Widodo said the regulation would ensure that Indonesia’ electric car industry exploits this advantage.

One type of environmentally friendly vehicles that will be prioritized by Widodo is an alternative fuel vehicle or called a ‘flexy’ car. Widodo revealed that most electric cars available in the market today were about 40 percent more expensive than fossil-fueled cars.

Therefore, he hoped that Indonesia’ ubiquitous resources of materials required for making the batteries would help push prices down, thus creating greater demand for EV. The government has asked French’ Renault and Swedish’ Volvo Group to consider building factories or assembly units in Indonesia, as it eyes production of 750,000 EV by 2030.

While Japan’ Toyota Motor Corp., and Germany’ Volkswagen has shown interest in manufacturing EV. The country’ total vehicle production is seen more than doubling to 3 million units during the period.

Widodo has promised give a tax incentives to draw foreign investment in the EV projects to save the country’ Rp798 trillion dependence on the crude oil imports.

US$1: Rp14,500

Written by Editorial Staff, Email: theinsiderstories@gmail.com