World’s Top Nickel Producer Sets Out End-to-End Battery Ambition

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Indonesia laid down its plans to have a complete battery production line onshore, with a state-owned holding firm to be set up by June.

The country has drafted an “end-to-end development” plan that would see four state firms supplying nickel ore, processing nickel sulfate and cobalt sulfate, and then producing cathodes and batteries, Agus Tjahajana, who heads the task force on electric-vehicle development, said in a Thursday seminar.

Resource-rich Indonesia, home to a quarter of the world’s nickel reserves, has set its sights on moving up the supply chain to become a global hub for battery-making. The surge in demand for batteries, used to power everything from mobile phones to electric vehicles, has become a tailwind for Southeast Asia’s largest economy as it seeks a way out of a recession.

“Indonesia will hold everything from upstream to downstream involving nickel and electric batteries in the battery holding company,” Ministry of State-Owned Enterprises spokesperson Arya Sinulingga said in the same event. “We have to proceed quickly.”

Miner PT Aneka Tambang will focus on nickel ore, while PT Indonesia Asahan Aluminium, known as Inalum, and energy holding co. PT Pertamina will oversee the production of battery and cell components. Pertamina and power producer PT Perusahaan Listrik Negara will look after electricity supply and infrastructure. Each of the state firms will hold a 25% stake in the Indonesian Battery Industry holding firm, which will be set up by June.

Potential Partners

In the last six months, at least two “very serious potential partners” are set to become partners in the supply chain, while one “newcomer” might join, Tjahajana said.

The potential projects include a 195 gigawatt-hour factory with capacity to produce 150 thousand tons of nickel ore a year, he said. About 70% of its output will be for Indonesia’s nascent electric-vehicle market, while the rest would be exported in cell form. The factory, valued upwards of $17 billion, will be a joint investment with foreign partners.

The government has called on some of the world’s top battery producers like China’s Contemporary Amperex Technology Co. Ltd. and South Korea’s LG Chem Ltd. to set up shop, while talks with Tesla are also ongoing.

“We are ready for Tesla to enter anywhere,” said Tjahajana. “We will prepare the land. Tesla just has to choose if it wants to partner with PLN or Pertamina.”

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