LG Corporation has agreed to lead a consortium investing in a new electric vehicle (EV) battery plant in Indonesia, according to reports in South Korea citing industry sources.

The consortium will include the South Korean conglomerate’s three subsidiaries LG Chem, EV battery maker LG Energy Solution and its trading unit LG International Corporation, as well as South Korea’s largest steel maker POSCO and Chinese cobalt company Huayou Holdings.

The plant will primarily supply lithium-ion batteries for EVs made by Hyundai Motor Group, at least initially, but is likely to also target other vehicles manufacturers both domestically and overseas.

An official statement is expected to be made by LG Corporation next week with additional details about the project. So far, the company has not commented on these reports.

Indonesia is estimated to be the world’s largest producer of nickel and it aims to become a major player in the global EV sector by producing raw materials and finished batteries as well as complete vehicles.

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By GlobalData

Last year the Indonesian government said it was in talks with a number of overseas EV battery companies, including key players in China and South Korea, to build an integrated EV battery supply chain to exploit the country’s abundant resources of cobalt, zinc and manganese.

The national policy is to encourage the development of downstream processing industries to make the most of the country’s natural resources and this is behind the government’s recent ban on exports of unprocessed materials.

Indonesia’s investment minister Bahlil Lahadalia also confirmed recently state-owned Indonesia Battery Corporation would cooperate with the consortium to build a US$1.2bn EV battery factory with an annual capacity of 10 gigawatt hours (GWh) just east of Jakarta, close to the country’s main car plants and container ports.