Minister of Investment/Head of Investment Coordinating Agency (BKPM) Bahlil Lahadalia said there are four joint venture companies that will be established by the two consortiums.

"I got the report that there are four joint ventures. Joint ventures 3 and 4 have been completed, while joint ventures 1 and 2 are still under discussion," Bahlil said on Wednesday, January 24, 2024.

A cooperation between a consortium of LG and Antam/IBC is developing a US$ 9.8 billion electric vehicle mega project in Indonesia. The LG consortium consists of LG Energy Solution, LG Chem, Huayou, LX International, Posco Future M and Indonesia consortium consisting of Antam and IBC.

The project starts from the construction of a battery cell factory in Karawang, West Java,  with a total investment of USD1.1 billion where the factory will commercially produce 10 GWh of battery cells in May 2024." This will be the first in Southeast Asia," Bahlil explained.  

Furthermore, the mega project investment will continue with the construction of a smelter, precursor and cathode factories, as well as mining cooperation currently operated by Antam in Buli, Halmahera, North Maluku.

Takes time

Deputy for Investment Promotion at the Ministry of Investment/ Investment Coordinating Agency (BKPM) Nurul Ikhwan said negotiation for the establishment of joint ventures takes time because both consortiums involved many companies. "Unlike our cooperation with CATL, the collaboration with LG involves many companies in consortiums," he explained.

Nurul said the Ministry of Investment is monitoring  the establishment of several joint ventures from precursor, mining to cathode production.

The respective phase of EV's battery production will be handled by different joint venture companies.

The consortiums are negotiating their shares ownership  in the respective chain of production of EV battery. Hopefully, the fair shares will not disrupt other joint ventures’  supply chain." They are still matching up the joint venture from one end of production to the other end, they want the whole ecosystem, they are still negotiating," Nurul said.

The negotiation on share ownership in respective joint ventures is important because it will affect decision making. "Because they want to secure from mining to battery industry, so they want to set up the chemistry first  and then make sure that their supply chain will not be disrupted," he said.