Investment Minister Bahlil Bluntly Said That There Are Neighboring Countries That Want To Prevent Indonesia From Becoming A World Battery Producer

Investment Minister Bahlil Lahadalia (Photo: Doc. Antara)

JAKARTA - The Minister of Investment/Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia revealed that many countries want to prevent Indonesia from becoming a world battery producer. Therefore, he said, the government needed to act quickly to start the early stages of developing the electric battery industry in the country.

Furthermore, Bahlil admitted that he had read the signs of neighboring countries that did not want Indonesia to advance in the electric car battery industry. Bahlil said, these countries only want to take raw batteries from Indonesia.

"We realize that our neighboring countries do not want Indonesia to become one of the battery producing countries in the world. They want to take raw materials from us, but make them in their country so that it is made in country A, made in country B. We read this sign," he said in a virtual press conference, Friday, September 17.

As is known, three main raw materials are needed for the manufacture of batteries, namely nickel, lithium and cobalt. For nickel, Indonesia controls 30 percent of the world's total. Compared to several other countries, Indonesia's advantage is that it has nickel laterite.

But unfortunately, Bahlil did not specifically mention which countries want to hinder Indonesia's steps to become the world's electric car battery producer. Even so, Bahlil emphasized that Indonesia is the first country in Southeast Asia to have an electric battery factory.

"This is the first time in Indonesia, in Southeast Asia. For this world, if you have built an ecosystem, one of the first in the world. This will already be built in 2022," he said.

Previously, President Joko Widodo (Jokowi) inaugurated the groundbreaking or laying of the first stone for an electric car battery factory in Karawang, West Java. He said that Indonesia provided support in the form of easy permits and legal certainty for the development of the downstream industry.

For your information, the project is the realization of an investment by the LG and Hyundai consortium consisting of the Hyundai Motor Company, KIA Corporation, Hyundai Mobis and LG Energy Solution.

"By saying bismillahirrahmanirrahim, I declare that the groundbreaking of the PT HKML Battery Indonesia Electric Vehicle Battery Factory has begun," said Jokowi, during the groundbreaking activity for the electric vehicle battery industry in Karawang, West Java, Wednesday, September 15.

The previous electric car battery development project was marked by a memorandum of understanding or MoU between the Ministry of investment and a consortium of Hyundai and LG in December 2020.

Later, the consortium from South Korea will partner with Indonesia Battery Corporation, which consists of PT Indonesia Asahan Aluminum (Inalum), PT Aneka Tambang Tbk (ANTM), PT Pertamina, PT Perusahaan Listrik Negara, and Contemporary Amperex Technology Co. Ltd.

The consortium will build an electric vehicle battery cell factory in Indonesia with a capacity of 10 Gigawatt Hours (GWH) with a total investment value of US$1.1 billion. This figure is equivalent to IDR 15.9 trillion (assuming an exchange rate of IDR 14,500). The construction of this factory is only part of the consortium's total project worth US$9.8 billion.

Jokowi targets Indonesia to become the largest electric vehicle producer in the world within the next three to four years. This is because Indonesia has large nickel reserves. As is known, nickel is the main raw material for lithium batteries.

Furthermore, Jokowi explained, this electric car battery factory is Indonesia's effort to get out of the trap of raw material exporting countries. Including in order to provide added value from nickel mining commodities. According to him, downstream nickel industry will significantly increase the added value of nickel ore.

Jokowi said, if nickel is processed into battery cells, its value can increase six to seven times. Then, if it is developed into an electric car, the added value will increase again, which is 11 times.

"Indonesia has the largest nickel reserves in the world with tremendous potential. I am sure that in the next three to four years, through good management, good management will be able to become a major producer of nickel-based finished goods such as lithium batteries, electric batteries , electric vehicle batteries," he said.