Korean Consortium Led By LG Energy Signs A $9 Billion Mining-to-Manufacturing EV Supply Chain Project In Indonesia To Reduce Chinese Dependence

A Korean consortium led by leading battery maker LG has signed an initial agreement with Indonesian state-owned companies to invest $9 billion to build a mines -to-manufacturing electric vehicle battery supply chain in Indonesia, an LG unit announced on Monday.

The agreement was inked between the consortium, consisting of LG Energy Solution (LGES), LG Chem, LX International and others, and Indonesia mining company, PT Aneka Tambang, better known as Antam, and the Indonesia Battery (IBC) in Jakarta, Thursday, LGES said in a press release.

LG Energy Solution is the the world’s second-biggest EV battery.

The project seeks to establish an "end-to-end value chain" for EV batteries encompassing the procurement of raw materials, producing key components, such as precursors and cathode materials, and the manufacturing of battery cells, LGES added.

Indonesia is the world's largest producer of nickel, a key battery material, in terms of reserves and output.

The lithium-ion battery has seen significant advancement in recent years, owing largely to the chemistry of the cathode, which continues to trend toward higher quantities of nickel.

The use of nickel in lithium-ion batteries lends a higher energy density and more storage capacity to batteries. This improved energy density and storage capacity means that electric vehicles can get more miles out of a single charge, a concept that has been a key challenge for widespread EV adoption.

Battery manufacturers like LG are moving to reduce their dependence on China. China currently accounts for 79 percent of the production of lithium-ion cells, and 80 percent of the chemicals used in lithium-ion batteries.

Also read: Nickel Prices Surges To Decadal High On The Back Of Rising EV Demand But New Mining Projects Promises To Ease Supply