Indonesia and Its Challenges in Developing Electric Vehicle Ecosystem
Several integrated electric vehicle battery projects from upstream to downstream have now started running, the collaboration between PT Aneka Tambang, Indonesia Battery Corporation (IBC) with LG and CATL, the HPAL nickel smelter project on Obi Island, Indonesia Konawe Industrial Park with Sulawesi Cahaya, and the Vale nickel smelter in Pomalaa. This year has been quite an exciting year for Indonesia, considering that so many investors are interested in investing in Indonesia, it’s just a matter of how the Government of Indonesia can take advantage of this momentum.
Deputy for Investment and Mining Coordination at the Coordinating Ministry for Maritime Affairs and Investment, Septian Hario Seto said last August the United States had just issued Inflation Reduction, a tax law that provides a sizable incentive package for battery companies. “We have to evaluate how competitive we are for the battery industry because the batteries that are actually developing a lot are non-nickel-based ones, which are growing quite rapidly,” he said. US policy encourages the Indonesian government to formulate a more comprehensive incentive scheme to attract investment.
Seto stated that there are two challenges for Indonesia in boosting downstreaming in the country. First, namely the limitations of human resources. With the rapid development of smelters in Indonesia, investors need at least 1000 graduates of metallurgy and materials science every year. The Indonesian government is currently asking local universities to open a metallurgy department to support investment needs in natural resource processing. The second challenge is the availability of lithium for electric vehicle battery raw materials in Indonesia. Currently, Indonesia still relies on imports to meet these raw materials. Seto had time to meet and discuss with several lithium companies from America and Australia, and invited them to build a lithium refinery in Indonesia.
