South Korea's LG Energy Solution, the world's largest electric vehicle (EV) battery manufacturer, has signed an agreement with the Indonesian government to invest in a global production hub for lithium ion batteries, according to media reports.
The memorandum of understanding was said to have been signed in Seoul on 18 December following more than a year of negotiations between the two parties.
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LG is looking to tap into Indonesia's vast nickel reserves and has agreed to invest in an integrated EV battery production operation to supply global markets.
The location of the proposed plant has not yet been disclosed but will likely be near a Hyundai Motor vehicle assembly plant currently under construction in Cikarang, just east of the capital city Jakarta.
The EV battery plant will be part of a broader US$9.8bn integrated investment plan being coordinated by the Indonesian government which includes a new nickel mine, smelter and refining operations in the remote Maluku islands. Resource development activity is expected to start in February, according to the head of the Investment Coordinating Board Bahlil Lahadalia.
Bahlil told reporters "LG has the market reach and technology while Indonesia has extraordinary reserves of raw materials. Combined, I believe we can become one of the most important EV battery players in the world."
Tesla is also understood to be considering investing in EV battery production in Indonesia.
A number of international firms, including China's Tsingshan Holding Group, are also currently investing in nickel battery processing plants in the country.
