JAKARTA (TheInsiderStories) – The South Korean battery giant, LG Chem Ltd., to sign a joint investment agreement to develop nickel become lithium battery for electric vehicle (EV) in Indonesia, said senior minister yesterday. The value of this project is estimated about US$20 billion.
“This week, if there is no change, LG from Korea will sign it immediately,” said coordinating minister for maritime and investment affairs, Luhut Binsar Pandjaitan, in a virtual seminar.
LG Chem is one of a number of world-class battery companies that have expressed interest in investing in Indonesia. Apart from LG, there is also Contemporary Amperex Technology Co. Ltd. A number of state-owned firms (SOEs) also formed a holding company, PT Indonesia Battery, led by the unit of PT Indonesia Asahan Inalum (MIND ID), PT Aneka Tambang Tbk (IDX: ANTM), together with PT Pertamina, and PT Perusahaan Listrik Negara.
According to CEO of MIND ID, Orias Petrus Moedak, the new holding company will be directed to cooperate with the two potential partners from China and South Korea. Unmitigated, he said the investment value was even estimated at $12 billion. He stated, “A concrete cooperation plan has been prepared, a plan to use nickel to produce batteries.”
Earlier, SOEs minister Erick Thohir said that the two largest producer of lithium batteries in the world were currently interested in joining Indonesia’ nickel downstream plan through the construction of a factory in the country. Beside, both companies, now Panjaitan approaching an American EV and clean energy firm, Tesla (NASDAQ: TSLA).
As reported, the company lead by Elon Musk, is interested in establishing a new battery factory in the country. To note, the manufacturer is trying to get more nickel supplies to support the production of electric cars. Currently, the company buying the battery supplies from Panasonic and CATL and is trying to have its own battery producer.
Last October, Panjaitan, admitted has been contacted Tesla on the planned. He stated, “I just called Tesla in America, they are also interested in building a lithium battery in Indonesia, because they see that Indonesia has the largest nickel ore reserves in the world.”
The producer, he added, is looking to build a lithium battery raw material factory in Indonesian Morowali Industrial Park areas, located in the Central Sulawesi province. Last year, the industrial park has collected US$5 billion investment.
The area owned two million tons capacity nickel pig iron production and 3.5 million tons of stainless steel. By the new lithium battery factory, Indonesia is expected to slash more import for the sake of decreasing the current account deficit. Provided that the facility does break ground, Tesla’ lithium battery raw material factory in Indonesia will reportedly be aiming for completion in around three years.
“Maybe (if it is completed) in the next three years. My batteries in the next three years would have become better, maybe faster. I think it must be the biggest because we are all, and our costs are cheaper because of the costs,” he said.
Similar factories, he said, are being negotiated to be built in Karawang, Purwakarta and Bekasi, West Java. The investment can bring the product closer to the Hyundai Motor Corp., electric car factory.
The minister revealed, the government is already preparing to welcome the arrival of the massive battery companies, including the Silicon Valley-based electric car maker. This is in line with the plan of the industry ministry to bring an investment in the automotive sector around Rp100 trillion ($7.14 billion). This target is planned to be achieved in the next five years.
According to him, a number of new investors have been interested in entering the field of supporting components of EV, such as batteries. However, the details of the investment have not been conveyed because they are still in the process of discussion with related parties.
Currently, there are two large factories that are ready to invest in electric vehicles in Indonesia, namely Hyundai and Toyota. The total investment reaches Rp50 trillion for the next five years. For Toyota, the investment value reached $2 billion for the next four years.
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