SEOUL -- LG Energy Solution and Indonesia's government will spearhead efforts to develop a seamless supply chain for electric vehicle batteries in the resource-rich Southeast Asian nation, the South Korean company said on Monday.
The supply chain will span the mining of raw materials to the production of EV batteries. LG Energy Solution is one of South Korea's largest battery makers. Total investment could reach about $9 billion, a source with knowledge of the project said.
The partnership is especially keen to secure a stable supply of nickel, for which prices are soaring.
Participants will include other LG group companies and South Korean steelmaker Posco, which produces electrodes. The Indonesian side consists of state-owned nickel miner Aneka Tambang, also known as Antam, and the Indonesia Battery Corporation, the state-owned holding company for battery concerns.
Chinese miner Zhejiang Huayou Cobalt is a partner as well. Members reached a nonbinding preliminary agreement and plan to finalize the structure later.
LG Energy Solution and Hyundai Motor are building an EV battery plant in Indonesia. To capture the global shift to electric vehicles, LG Energy Solution is building five battery plants in North America and investing to expand production in Poland and China.
Indonesia holds a wealth of nickel deposits. LG Energy Solution projects that the upswing in raw material prices will continue well into the future due to growing demand from battery producers. The company is collaborating with Indonesia, seeking access to a steady supply of raw materials.
Jakarta looks to develop nickel-related industries that will turn batteries and EVs into the country's key exports. Indonesia has also drawn investment from Chinese company CATL, the world's leading battery supplier.