State-Owned Enterprises with LG Consortium Ready to Build Battery Industry in Indonesia

Publication / Press Release / May 2021
Minister of Investment/Chairman of Indonesia Investment Coordinating Board (BKPM) Bahlil Lahadalia witnessed the signing of Heads of Agreement (HoA) of the Integrated Battery Investment between PT Industri Battery Indonesia and the LG Battery Consortium from South Korea on April 29, 2021, at the BKPM Office, Jakarta. The event was also attended by Minister of State-Owned Enterprises (BUMN) Erick Thohir, President Director of PT Industri Battery Indonesia Toto Nugroho, the board of directors of SOEs, as well as the leadership of the LG Consortium consisting of LG Energy Solution, LG Chem, LG International, POSCO and Huayou Holding. The signing was also witnessed online by the Ambassador of the Republic of Indonesia to the Republic of Korea Umar Hadi and the Ambassador of the Republic of Korea to the Republic of Indonesia Park Taesung.

The Minister of Investment/Chairman of BKPM who continues to oversee this giant investment project said that this is a historic moment for the three countries, Indonesia, South Korea, and China. This is proof of the seriousness of the government and SOEs to realize this project immediately.

PT Industri Battery Indonesia or Indonesia Battery Corporation (IBC) is a world-class electric vehicle battery company that maximizes the potential of Indonesia's resources, through the establishment of an electric vehicle battery ecosystem by proactively building the battery market and electric vehicle ecosystem in Indonesia. PT Industri Battery Indonesia also builds capabilities, increases competitiveness, and supports the development of national electric vehicles, so that they can become ASEAN's production base. PT Industri Battery Indonesia was formed by four SOEs namely Mining and Industry Indonesia (MIND ID), PT Pertamina (Persero), PT PLN (Persero), and PT Aneka Tambang (Antam) and as partners of the Korean consortium in developing integrated battery projects in Indonesia will identify shortly after this collaboration is formalized.

The signing of the HoA is a positive signal that a battery manufacturer from South Korea, LG Group, will soon realize an electric vehicle battery industry project in Indonesia. LG Group, together with POSCO, officially collaborated with SOEs to build the project. This signing is the result of a follow-up to President Moon Jae In’s meeting with President Joko Widodo in Busan, South Korea on November 25, 2019, and the BKPM-LG Group Memorandum of Understanding (MoU) signed by the Minister of Investment/Chairman of BKPM and CEO of LG Energy Solution on December 18, 2020, in Seoul, South Korea. This giant and strategic investment project collaboration in the electric vehicle battery cell industry is integrated with mining, smelting (smelters), refining as well as precursor and cathode industries. The value of the investment plan reaches USD9.8 billion. HoA is the starting point for cooperation which will be followed by a Joint Study, shareholder agreement, and company establishment agreement.