European firms plan $9bn Indonesian battery investment

A European consortium is planning to work with Indonesian firms, including state-owned mining firm Antam, to set up an electric battery ecosystem in the country.

"The plan is to invest approximately $9bn," said Indonesia's investment minister Bahlil Lahadalia. "If we can speed it up, we will do it. This is an investment in building a car battery ecosystem from mines to battery cells."

The minister revealed the investment plan by the consortium — involving Switzerland-based trading firm Glencore, Chinese renewable energy company Envision's UK arm and Belgian battery materials maker Umicore — after attending a meeting chaired by Indonesia's President Joko Widodo on 31 May. The meeting was held to discuss Indonesia's investment developments and "plans for the development of an integrated electric battery industry", where Widodo encouraged the acceleration of investment in the Bantaeng Green Industrial Zone, south Sulawesi and west Papua.

"The directive is that we will accelerate it because this investment will be built in a green energy industrial area and will use wind power in Sulawesi in Bantaeng," said Lahadalia.

"There are too many studies in this country and then we forget the more important matters. So the president wants it to be accelerated. In September everything must be completed," he added.

But Widodo requested that the acceleration be primarily on administration and reminded that it should be in accordance with the applicable rules and laws.

"The point is to go through the mechanism and accelerate according to the applicable legislation rules. The acceleration referred to by the president is things related to administration processes and mechanism [in] accordance to the rules that can be accelerated," Lahadalia explained.

The investment could lead to 20GWh of battery cell production in its first phase, according to the investment minister, with a plan to subsequently boost production capacity based on domestic and overseas demand.

Indonesia is looking to quickly establish itself as a production powerhouse for electric batteries and electric vehicles (EVs) in southeast Asia, similar to what the Philippines is aiming for, using their plentiful energy resource minerals.

Indonesia on 25 May also signed an initial agreement with Chinese major EV manufacturer BYD as its seeks to explore potential for greater EV investment between Indonesia and China.

"We want to develop the EV ecosystem in Indonesia so that it can become the largest automotive market in southeast Asia, and we appreciate BYD's initiative to explore this opportunity further," said Indonesia's co-ordinating minister for maritime affairs and investment Luhut Binsar Pandjaitan.

By Joseph Ho