Four Indonesian State-Owned Companies came together as majority stakeholders for the creation of Indonesia Battery Corporation, or IBC, with each owning a 25 percent stake.
On March 16, 2021, four major state-owned enterprises signed a shareholder agreement to the IBC ownership structure. These companies are oil giant Pertamina, state-owned electricity company PLN, mining holding company MIND ID, and nickel and gold miner PT Aneka Tambang, or ANTAM. The creation was announced on March 27, 2021, in a press conference hosted by the Minister of State-Owned Enterprises Erick Thohir.
The creation of the battery holding company marks another step forward for Indonesia鈥檚 ambitions of becoming a leading global supplier of batteries for electric vehicles. The move comes after the announcement of a US$9.8 billion (around Rp 142.9 trillion in current exchange rates) investment commitment from South-Korean multinational corporation LG to develop an integrated battery industry, from mining, smelting and refining, precursor and cathode industries late last year.
鈥淲e want to create an added-value economy in our mining and energy industries, particularly in regards to nickel, which is the main component of EV batteries, to develop that electric vehicle ecosystem and contribute to the goals of sustainable development. Furthermore, an investment of this scale means more work opportunities especially for the younger generation,鈥� said Mr. Thohir, as quoted from the Ministry鈥檚 official website.
According to data from the US Geology Survey, Indonesia has the world鈥檚 largest reserves of nickel (at around 4.3 billion tons as of 2020), an essential component of lithium batteries widely used in various goods, from home appliances to electric vehicles. Indonesia鈥檚 nickel mining capacity is also well-developed, with the country supplying 29% of the global demand.
As for Indonesia鈥檚 car market, the country aims to have a production and sales capacity of 8.8 million for two-wheeled vehicles and 2 million for four-wheeled vehicle by 2025. A stronger domestic supply chain could potentially meet 35% of the components of electric vehicle batteries, according to data from the Ministry.
Mr. Thohir said the investment for the creation of IBC is valued at US$17 billion, adding that the holding will be investing the money in the upstream side of the business first before moving towards the downstream side for the first 2 years. He said IBC will also synergize with other global players in the industry. As a latest update, IBC has reportedly settled on a partnership with China鈥檚 Contemporary Amperex Technology, for a total investment of $5 billion, as well as LG Chem for a total investment of between $13-17 billion.