Establishing an Integrated Process System
From Nickel Mining and Smelting to Cathode Material Production
According to Antara News Agency on June 26 (local time), Indonesia will launch an electric vehicle battery project worth $6 billion (approximately 8.2 trillion won) in partnership with CATL, the world’s leading electric vehicle battery company based in China.
According to the report, Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, told reporters the previous day that President Prabowo Subianto is scheduled to attend the groundbreaking ceremony for the integrated electric vehicle battery project on June 29 in East Halmahera, North Maluku.
Minister Lahadalia stated, “This project is unprecedented in both type and scale worldwide,” and expressed expectations that this $6 billion integrated system will significantly lower electric vehicle battery production costs in Indonesia. The integrated facility will encompass multiple processes, including mining, smelting, high-pressure acid leaching (HPAL), precursor production, and cathode material manufacturing.
Indonesia, the world’s largest country in terms of nickel reserves and production, aims to become a global powerhouse in electric vehicle batteries based on its nickel resources. To achieve this, the Indonesian government launched a grand package project in 2020 that covers the entire value chain from nickel mining, refining, precursor and cathode material production, to battery cell manufacturing. As part of this initiative, Indonesia signed memoranda of understanding (MOUs) with partners such as CATL and LG Energy Solution.
However, the consortium led by LG Energy Solution failed to make significant progress due to several reasons: lack of infrastructure, a temporary stagnation in electric vehicle demand (the so-called “chasm”), and conflicts over the equity structure. As a result, LG Energy Solution has reportedly withdrawn from the project itself.
Under this plan, CATL will now establish an integrated system covering the entire process from mining to cathode material production. In addition, CATL is expected to invest about $1.2 billion (approximately 1.6 trillion won) together with Indonesia’s state-owned battery investment company IBC to build a battery cell plant in Indonesia.
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