"Considering Market Conditions and Investment Environment"
Impact of Market Changes Such as the Electric Vehicle Chasm
The 11 trillion won battery value chain project, which had been promoted by the LG consortium and the Indonesian government, has been canceled.
According to industry sources on April 18, the LG consortium recently decided to withdraw from the "Grand Package Project" after discussions with the Indonesian government.
Previously, in 2022, LG Energy Solution formed a consortium with LG Chem, LX International, POSCO, and Chinese company Huayou to pursue the Grand Package Project, which would cover the entire process from nickel mining and refining to precursor, cathode material, and battery cell production.
This project aimed to establish a "closed-loop value chain" in cooperation with the Indonesian government and state-owned enterprises, with a total project scale of approximately 11 trillion won.
At the time, the LG consortium launched the project to secure a stable supply of battery raw materials, whose prices had surged, and to strengthen its battery business capabilities and profitability over the mid- to long-term.
However, due to the recent electric vehicle chasm?a temporary stagnation in demand?and rapidly changing market conditions and investment environment in the battery sector, it has been reported that the project will be ultimately withdrawn.
An LG Energy Solution representative stated, "Considering market conditions and the investment environment, we have decided to withdraw from the Grand Package Project. However, we plan to continue our business in Indonesia, focusing on our battery joint venture, HLI Green Power, and will continue discussions with the Indonesian government on various mid- to long-term cooperation plans."
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