South Korea’s LG Energy Solution and Indonesia’s government will spearhead efforts to develop a seamless supply chain for electric vehicle batteries in the resource-rich country, the company said.
The supply chain will span the mining of raw materials to the production of EV batteries. LG Energy Solution is one of South Korea’s largest battery manufacturers. Total investment could reach about $9 billion, a person knowledgeable about the project said.
The aim is to secure a stable supply of nickel, for which the price has soared. Participants will include other members of the LG group along with South Korean steelmaker Posco, which produces electrodes. The Indonesian side consists of state-owned nickel miner Aneka Tambang, also known as Antam, and Indonesia Battery, the state-owned holding company for battery concerns.
Chinese miner Zhejiang Huayou Cobalt is a partner as well. Members reached a nonbinding preliminary agreement, with plans to finalize the structure later.
LG Energy Solution and Hyundai Motor are building a joint venture EV battery plant in Indonesia. To capture the global shift to electric vehicles, LG Energy Solution is building five battery plants in North America and investing to expand production in Poland and China.
Indonesia holds a wealth of nickel deposits. LG Energy Solution projects that the upswing in raw material prices will continue well into the future due to growing demand from battery production.
The company is collaborating with Indonesia, seeking access to a steady supply of raw materials.
Jakarta looks to develop nickel-related industries that will turn batteries and EVs into the country’s key exports. The country has previously drawn investment from Chinese company CATL, the world’s leading battery supplier.