Industri Baterai Indonesia, a company established earlier this year by the Indonesian government to build electric vehicle (EV) battery manufacturing factories and related raw materials supply chain operations in the country, estimated it would need to spend over US$15bn to complete the project, according to a senior executive at the company.

Four state-owned companies each own 25% of IBI’s equity, including oil company Pertamina, mining company Antam, national electricity utility firm Perusahaan Listrik Negara (PLN) and mining holding company Indonesia Asahan Aluminum also known as Mining Industry Indonesia.

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Indonesia wants to make the most of its available raw materials to gain a significant share of the fast growing global EV business.

Toto Nugroho, president director of IBI, said the spending was needed to establish operations covering the entire production chain and life cycle of the batteries, from raw materials mining, smelting/refining and battery chemical manufacturing operations to battery cell manufacturing and ultimately recycling operations of used batteries.

The company has a 2025 deadline to get the supply chain up and running and is in talks with a number of potential strategic investors to bring technical expertise and also funding to the project in return for an undisclosed stake in the business.

These include Chinese battery manufacturer Contemporary Amperex Technology Company Limited (CATL) and South Korea’s LG Energy Solutions.

Nugroho, speaking at the 2021 Investor Daily Summit, said: “We need an investment of over US$15bn, which is a challenge in itself. There is a timeline of around 3-4 years.”

The company broke down the investment it needed to ready 140 gigawatt-hours (GWh) in annual EV battery capacity for sale. It included a US$160m spend on local mining operations for nickel rich ores such as limonite and saprolite; US$2.6bn to build two ore processing/smelting facilities, including a rotary kiln electric furnace (RKEF) and a high-pressure acid leaching (HPAL) facility.

An estimated US$1.8bn was needed for a facility to produce battery precursor materials and a further US$3.8bn for cathode production, while the factories to produce the battery cells were estimated to require US$6.7bn. A battery recycling plant would cost a further US$30m.