Indonesia Battery Cooperation To Acquire Overseas Lithium Mine For Domestic EV Battery Production
State-owned Indonesia Battery Corporation (IBC) plans to acquire a lithium mine overseas as part of a strategy to help ensure raw material supply for domestic EV battery production. Dany Amrul Ichdan, Director of Institutional Relations of state-owned mining holding company MIND ID, said that while 80 percent of battery materials are nickel based, Indonesia, which has abundant nickel reserves, still relies on imports for the remaining 20 percent raw materials.
Speaking at a hearing with the House of Representatives Commission VII on energy and mining on Monday, Dany said that IBC is preparing a roadmap to reduce import of the battery materials, as IBC aims to become the market leader in Southeast Asia. The largest (import volume) is lithium hydroxide of about 70,000 tons per year, imported from China, Chile, and Australia. Other imported minerals are graphite with a volume of 44,000 tons per year from China, Brazil and Mozambique; and sulfate and cobalt sulfate, each with import volume of 12,000 tons per year, to meet domestic demand. IBC is preparing a roadmap, containing strategies on how to reduce import of the minerals.
IBC also conveyed its plans to operate HPAL smelter with China’s Ningbo Contemporary Brunp Lygend Co., Ltd (CBL Consortium), called the Dragon Project, in the first quarter of 2025. “We have locked this timeline with our partner, CBL. Nickel processing facility with HPAL technology will start operating in early 2025. The HPAL plant will process nickel limonite ore into mixed hydroxide precipitate (MHP) products with a planned annual production capacity of 55,000 ton. No details on the construction timeline. CBL will build the entire facility until the first phase of battery cell production in East Halmahera. Then in the second phase, CBL will build a nickel sulfate, precursor, cathode and battery cell processing project in the North Kalimantan Industrial Estate, as well as build a battery recycling plant. IBC is assigned by the government to spearhead the development of an integrated EV battery industry in the country.
IBC requested the support of Commission VII of the House of Representatives to divert energy subsidies such as fuel oil to the procurement of battery-based EV infrastructure at the consumer level. Incentives on the consumer side and manufacturers of electric vehicles and batteries have begun to be carried out by a number of developed countries and have proven successful in improving the EV ecosystem in these countries.
The Center of Economic and Law Studies (Celios) considers that the proposed transfer of energy subsidies to batteries and electric cars is not appropriate because it is a tertiary need with the middle to upper class community market which does not represent the needs of the majority of Indonesian people. The proposal also does not solve the problem of mistargeted energy subsidies. The transfer of existing energy subsidies can be more optimal if the orientation is for public transportation. The government can divert the energy subsidy budget to add electricity-based public transportation modes, so that the number and reach are wider, not only in big cities.
