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Indonesia Starts Construction of Southeast Asia’s First Electric Vehicle Battery Factory

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President Joko "Jokowi" Widodo, center, converses with several people on the sidelines of HKML Indonesia's battery plant groundbreaking on Wednesday, Sep 15, 2021. (Photo courtesy of Presidential Press Bureau)

Indonesia Starts Construction of Southeast Asia’s First Electric Vehicle Battery Factory
BY :GRACE N. CHANDRA, NOVY LUMANAUW
SEPTEMBER 15, 2021

Karawang. President Joko "Jokowi" Widodo has broken the construction ground of the first electric vehicle battery factory in Southeast Asia, marking an important milestone in the country's drive to establish itself as a key global battery supplier.

HKML Indonesia, controlled by a consortium of South Korea’s companies and Industri Baterai Indonesia, a subsidiary of a state-controlled miner, will build and operate the $1.1-billion factory is located in Karawang New Industrial City, West Java.

"We are grateful today to witness the groundbreaking of the first electric vehicle battery factory in Indonesia, and the first in Southeast Asia, with an investment value of $1.1 billion," said President Jokowi on Wednesday.

The factory construction the government's objective to establish a downstream industry for the country's mining resources, especially nickel, Jokowi said. The era of exporting raw commodities was over, and Indonesia must strive to shift from the commodity-based economic structure to one with a strong downstream industry based on the development of technological innovation, he said.

"Indonesia’s current business strategy is to escape our dependence on countries exporting raw materials and their imported products by accelerating the revitalization of the processing industry. This will provide our industry with a higher value,” Jokowi said.

The first phase of development within the Karawang factory sees a battery production capacity of up to 10-gigawatt hour (GWh) per year.

“One factory will become operational in 2022 to produce 10-gigawatt hours of battery,” Toto Nugroho, president director of Industri Baterai Indonesia, told the audience in the 2021 Investor Daily Summit last July.

The factory would supply electric vehicles from Hyundai, a South Korean automaker. Hyundai was also the first company to announce plans for electric vehicle productions in Indonesia, with a $1.5 billion factory set up in Cikarang.

The groundbreaking followed to the Head of Agreements on battery investment project between Industri Battery Indonesia and the LG-led consortium in April 2021. LG Energy Solution, LG Chem, LG International, Posco, and Huayou Holding were all involved in the consortium.

The companies have the vision to build an integrated supply chain for lithium-ion battery production in Indonesia, from the mining of raw materials, smelting, refining, precursor, and cathode industries.

Bahlil Lahadahlia, the head of the Investment Coordinating Board (BKPM) said earlier that total investment for the integrated supply chain project could reach $9.8 billion.

The forerunner of the collaboration between Industri Battery Indonesia and the LG Consortium began in 2019 when President Jokowi and President of South Korea, Moon Jae In, met in Busan, South Korea.

After going through a series of assessment processes, negotiations, and service studies, the two parties finally agreed to sign a memorandum of understanding on December 18, 2020, in Seoul, South Korea.

Industry Battery Indonesia is a consortium of four prominent state-run mining and energy companies — Indonesia Asahan Aluminum (MIND ID), gold and nickel miner Aneka Tambang (Antam), energy company Pertamina, and utility firm Perusahaan Listrik Negara (PLN).


 

313ghazi

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Very forward thinking.

the factory construction the government's objective to establish a downstream industry for the country's mining resources, especially nickel, Jokowi said. The era of exporting raw commodities was over, and Indonesia must strive to shift from the commodity-based economic structure to one with a strong downstream industry based on the development of technological innovation, he said.
This is a model we should be following.
 

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Very forward thinking.



This is a model we should be following.
Indonesia will enforce 2022 ban on raw mineral ore exports: official




MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 060.Pers/04/SJI/2020

Date: 6 February 2020

2023, Indonesia Stops Gas Supply to Singapore

The government confirms it will stop pipeline gas to Singapore. The termination will start in three years in order to meet the domestic demand for gas.

Head of Downstream Oil and Gas Regulating Agency (BPH Migas), Fansurullah Asa, asserted the government was currently looking for domestic markets to absorb the diverted gas supplies. "Because in 2023 gas exports to Singapore are stopped, the gas must be delivered somewhere (to which market)," said Head of BPH, whose nickname is Ifan, at BPH Migas building in Jakarta, Wednesday (5/2).

The decision confirms the previous statement of Minister of EMR, Arifin Tasrif, at a work meeting with Commission VII of House of Representatives. "Gas is in abundance in Sumatra, supplies to Singapore which will end in 2023 will be diverted to domestic markets," said Arifin last November.

The plan is to channel the gas formerly supplied to Singapore to the Duri Dumai pipelines, and later send it to industrial estates in Sumatra. The gas to be sold to the industrial estates is priced at USD6 per MMBTU, according to the rules in Presidential Regulation Number 40 of 2016 on Pricing of Natural Gas.

This plan, added Ifan, is expected to create added value and to reduce trade balance deficit due to the conversion from oil fuels to gas.

To date, gas supplies to Singapore come from Corridor Block managed by ConocoPhillips which amount to 300 Million Standard Cubic Feet per Day (MMSCFD). To support the transfer of gas supplies, the government has prepared the infrastructure by developing transmission pipelines such as Dumai-KEK Seimangke and Distribution Network Area (WJD). "There are 193 WJD's proposed by Business Entities," concluded Ifan. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

 
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Hyundai and LG start building $1.1bn EV battery plant in Indonesia
Jokowi says factory comes as nation tries to escape 'trap' of raw materials

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Indonesian President Joko "Jokowi" Widodo, at left, sees cooperation with South Korean companies on electric vehicle batteries as a major step in the country's economic development. (Photo courtesy of Indonesia's presidential office)

ERWIDA MAULIA, Nikkei staff writerSeptember 15, 2021 19:11 JST

JAKARTA -- South Korea's Hyundai Motor Group and LG Energy Solution on Wednesday kicked off the construction of a $1.1 billion electric vehicle battery plant in Indonesia, which President Joko "Jokowi" Widodo hailed as marking the country's shift away from resources toward technology.

LG Energy CEO Kim Jong-hyun said the factory will churn out "next generation" lithium-ion battery cells using the company's new NCMA technology, with production expected to start in 2024 and output to be exclusively used by Hyundai and its affiliate, Kia. NCMA refers to nickel, cobalt, manganese and aluminum-based battery cells containing 90% nickel, which LG said offer a competitive edge in performance and price by using less cobalt and adding aluminum.

"Using Indonesia ... as a steppingstone, we will actively develop this factory as a main base toward the global electric vehicle market beyond ASEAN," Kim said in a video speech played during the groundbreaking ceremony for the new plant in Karawang on the island of Java.

"Through the joint venture with Hyundai Motor, we're planning a grand package of investments from mines to cells and will become a reliable partner for Indonesia in the development of the economy and technology," he added.

The factory will sit on a 330,000 square-meter plot of land, about a two-hour drive from Jakarta. It is expected to produce 10 GWh worth of lithium-ion battery cells annually when fully operational, or enough for more than 150,000 EV batteries.

Hyundai, meanwhile, is building an automobile factory nearby, with production slated to commence next year.

Indonesia's investment minister and the head of the Investment Coordinating Board, Bahlil Lahadalia, said the battery plant is part of a $9.8 billion plan signed with LG Energy last December to develop an integrated battery industry in Southeast Asia's largest economy through partnerships with several state-owned enterprises.

The plan includes the ongoing construction of a nickel smelter in North Maluku Province in eastern Indonesia and a project to build a cathode precursor and recycling facility in Central Java Province that might break ground near the end of this year.

Indonesia holds the world's largest proven reserve of nickel, which it wants to use to become part of the global supply chain for electric vehicles.

The government has rolled out the red carpet for Hyundai and LG to develop the battery plant, helping the South Korean companies bypass notorious bureaucratic hurdles that have kept many investors away. "They only need to bring in the capital and technology and make the market, while the Indonesian government is taking care of the permits and incentives, in line with instructions from the president," Lahadalia said.

Widodo, who attended the ceremony in Karawang, said the construction of the battery plant proves the government's "serious commitment" to developing Indonesia's downstream mining industry and "escaping as soon as possible from the trap of raw material" exports.

"The golden age of raw material commodities has ended," Widodo said. "We have to boldly change the commodity-based economic structure to downstream and industrialization, [to] become a powerful nation based on the development of technology innovations."

He added that he hopes developing the domestic battery industry will draw investments to support the local manufacture of electric vehicles, including motorbikes and buses.

 

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The following export product groups represent the highest dollar value in Indonesian global shipments during 2020. Also shown is the percentage share each export category represents in terms of overall exports from Indonesia.

  1. Mineral fuels including oil: US$25.6 billion (15.7% of total exports)
  2. Animal/vegetable fats, oils, waxes: $20.7 billion (12.7%)
  3. Iron, steel: $10.8 billion (6.6%)
  4. Electrical machinery, equipment: $9.2 billion (5.7%)
  5. Gems, precious metals: $8.2 billion (5%)
  6. Vehicles: $6.6 billion (4%)
  7. Rubber, rubber articles: $5.6 billion (3.4%)
  8. Machinery including computers: $5.2 billion (3.2%)
  9. Footwear: $4.8 billion (2.9%)
  10. Paper, paper items: $4.2 billion (2.6%)
Indonesia’s top 10 exports totaled 61.9% of Indonesia’s total exports.

Iron and steel was the fastest grower among the top 10 export categories, up by 46.8% from 2019 to 2020. In second place for improving export sales was gems and precious metals via a 24.2% gain. Indonesia’s shipments of animal or vegetable fats, oils and waxes posted the third-fastest gain in value up by 17.5%.

The leading decliner among Indonesia’s top 10 export categories was mineral fuels including oil thanks to a -25% drop year over year.

 

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Indonesian state owned company, PT INALUM whose stakes are totally own by government has 20 % stake in Vale Indonesia. Adriansyah Caniago is coming from INALUM.

___________________________________

Vale Indonesia eyes 2026 completion for nickel HPAL plant
CONTRIBUTOR
Fransiska Nangoy Reuters


JAKARTA, Sept 8 (Reuters) - Indonesian nickel miner PT Vale Indonesia INCO.JK said it aims to start construction at its Pomalaa project next year to produce material used in batteries for electric vehicles, executives said on Wednesday.

Vale is currently amending its environmental impact study for the project and hopes to secure necessary permits for construction to start next year, Adriansyah Chaniago, its deputy chief executive, told a virtual media briefing.

"An HPAL takes a while to build. We plan for mechanical completion in 2026," said chief financial officer Bernardus Irmanto, referring to high pressure acid leach process of extracting chemicals from nickel ore.

The plant in Pomalaa, in Southeast Sulawesi province, is expected to produce 40,000 tonnes of mixed sulphide precipitate, a component for EV batteries, he added.


Vale is also studying the prospect of mining limonite, which is found among its reserves and could be used in production of EVs, added chief executive Febriany Eddy.

(Reporting by Fransiska Nangoy; Editing by Martin Petty)

((Fransiska.Nangoy@thomsonreuters.com;))

 

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The following export product groups represent the highest dollar value in Indonesian global shipments during 2020. Also shown is the percentage share each export category represents in terms of overall exports from Indonesia.

  1. Mineral fuels including oil: US$25.6 billion (15.7% of total exports)
  2. Animal/vegetable fats, oils, waxes: $20.7 billion (12.7%)
  3. Iron, steel: $10.8 billion (6.6%)
  4. Electrical machinery, equipment: $9.2 billion (5.7%)
  5. Gems, precious metals: $8.2 billion (5%)
  6. Vehicles: $6.6 billion (4%)
  7. Rubber, rubber articles: $5.6 billion (3.4%)
  8. Machinery including computers: $5.2 billion (3.2%)
  9. Footwear: $4.8 billion (2.9%)
  10. Paper, paper items: $4.2 billion (2.6%)
Indonesia’s top 10 exports totaled 61.9% of Indonesia’s total exports.

Iron and steel was the fastest grower among the top 10 export categories, up by 46.8% from 2019 to 2020. In second place for improving export sales was gems and precious metals via a 24.2% gain. Indonesia’s shipments of animal or vegetable fats, oils and waxes posted the third-fastest gain in value up by 17.5%.

The leading decliner among Indonesia’s top 10 export categories was mineral fuels including oil thanks to a -25% drop year over year.

This is a good sign. Non renewable energy should no longer be exported as domestic demand increases and new energy sources might not be quickly available for mass uses. As Iron, steel, I think these are dominated by stainless steel as we are actually in deficit for crude steel needed for construction by 6 mio tonne.
 

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This is a good sign. Non renewable energy should no longer be exported as domestic demand increases and new energy sources might not be quickly available for mass uses. As Iron, steel, I think these are dominated by stainless steel as we are actually in deficit for crude steel needed for construction by 6 mio tonne.
Yup, we need to industrialize Sumatra further. Many industry which needs palm oil as their main raw material input will see Sumatra as very interesting place to set up factories if Sumatra can give assurance on gas supply with competitive price

The building of Sumatra highway will not make significant impact if the gas supply is not built sufficiently. Fertilizer industries can also benefit as we see there is big state own fertilizer and petrochemical company in Aceh province already.

 

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Indonesia considers export tax for products with less than 70% nickel content
By Reuters Staff

SEPTEMBER 17, 2021, 2:48 AM


JAKARTA (Reuters) - Indonesia is exploring the possibility of levying an export tax on nickel products with less than 70% nickel content to drive expansion of its domestic processing industry, Investment Minister Bahlil Lahadalia said on Friday.

Indonesia is keen to develop a full supply chain for nickel, from extracting ore from its rich nickel reserve to producing batteries and assembling electric vehicles (EVs) at home.

Most nickel products exported from Indonesia have nickel content of 30% to 40% and could be refined further domestically to at least 70% content, Bahlil told a virtual media briefing.


“If producers want to export the products with less than 70% nickel content, it is possible that we apply an export tax,” he said, adding that discussions were at an early stage and no details had been decided yet.

Indonesia’s processing industry is dominated by low-nickel content products such as nickel pig iron or ferronickel. It halted exports of unprocessed nickel ore last year to support its “downstream” supply-chain ambitions.

The country has a lot of bargaining power to attract downstream investments, but policy changes could spook some investors, said Steven Brown, an independent mining industry consultant.


“Sudden export restrictions can cause uncertainty and may scare off the more cautious investors,” Brown said. “Indonesia has already been successful in attracting some big investments, such as the Hyundai and LG battery plant that is now under construction.”

On Thursday, South Korea’s LG Energy Solution (LGES) and Hyundai Motor Group started building the $1.1 billion plant to make batteries for electric vehicles.

Reporting by Fransiska Nangoy; Editing by Pravin Char

 

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Mining holding firm MIND ID plans to spin off Inalum this year


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Vincent Fabian Thomas (The Jakarta Post)
PREMIUM
Jakarta
● Tue, September 28, 2021

State-owned mining holding company MIND ID plans to spin off its aluminum operations into PT Indonesia Asahan Aluminium (Inalum) Operating, allowing the holding company to focus on long-term business planning and the subsidiary to go public.

Ogi Prastomiyono, director of strategic services at MIND ID, said the separation would make it easier for MIND ID to make new subsidiaries, dominate strategic commodity reserves, establish downstream industries and attract funding, among other long-term plans.

The holding company aimed to execute the spinoff by this year, so that Inalum Operating could conduct an initial public offering (IPO) by the end of 2022. MIND ID has yet to determine the amount of Inalum Operating stakes to be sold at the IPO.

 

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Antam to build smelter in North Konawe

7th Oct 2021 05:16


Kendari (ANTARA) - State-owned mining company PT Aneka Tambang (Antam) Tbk is committed to building a smelter in its nickel mining concession in North Konawe district, Southeast Sulawesi province, as part of its business expansion. PT Antam signed a Heads of Agreement with Alchemist Metal Industry Pte Ltd and PT Gunbuster Nickel Industry on the development of nickel purification business, Antam General Manager for North Konawe Hendra Wijayanto said Wednesday.

“The signing took place last May in the presence of State-Owned Enterprises Minister Erick Thohir, Investment Minister/Head of the Investment Coordination Board (BKPM) Bahlil Lahadalia, and Director-General of Mineral and Coal at the Energy and Mineral Resources Ministry Ridwan Jamaluddin," Wijayanto said.

Related news: Antam`s profit in s1 increases significantly

This agreement marks the initiation of a new nickel purification business ecosystem for Antam in North Konawe and North Morowali, Southeast Sulawesi, and becomes a milestone for MIND ID Group to maximize Indonesia’s added value nickel resources, he said.

Antam is also fully committed to implementing good mining practices in each of its operations, Wijayanto added.

In carrying out any mining activity, Antam always pays attention to technical aspects and operational standardization of mining activity and conservation of mineral resources, he said.

In addition, Antam also accords priority to its commitment to keep the occupational safety and health and the environmental protection aspect in accordance with environmental documents such as the environmental impact analysis (AMDAL) and Post-Mining Plan Document (RPT).

Related news: Antam`s gold output projected at 3.3 tons next year
Related news: Antam to expend Rp399 billion in dividends


Translated by: Hernawan W/Suparman, Suharto
Editor: Mulyo Sunyoto

https://en.antaranews.com/news/193009/antam-to-build-smelter-in-north-konawe
 

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Freeport Indonesia majority stake is in the hand of state own mining Holding, MIN ID. This is smelter to process cooper and cooper is one of the main ingredient of current EV battery technology. The smelter will produce cathode and anode that is needed in EV battery industry

Copper is the primary material for EV battery connectors and the wiring harness, which allows for the flow of electricity throughout the car. It also makes up the windings that are central to an electric motor.

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Jokowi Inaugurates Freeport Smelter Construction in Gresik


TEMPO.CO, Jakarta - President Joko “Jokowi” Widodo on Tuesday, Oct. 12, departed to the East Java Province from the Halim Perdanakusuma Military Airbase.

As the President and his entourage landed at the Juanda International Airport, they immediately traveled to the Gresik Special Economic Zone (KEK) to inaugurate the groundbreaking of a Freeport Indonesia smelter construction.

The construction of the smelter located in the Java Integrated Industrial and Port Estate (JIIPE) Gresik is planned to start in 2023.

Vice President Corporate Communication of PT Freeport Indonesia, Riza Pratama, mentioned in an Antaranews report that the massive project would likely cost up to US$3 billion. The location was picked as it is compatible with a cement plant, which can utilize the results of processing sulfuric acid, silver and gypsum.

“Why is the Freeport smelter built in Gresik? One of the reasons is that it can be used by the cement plant to manage sulfate acid, which dominates,” said Riza.



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Older news but with more detail explanation

Freeport Indonesia Smelter Operates December 2023
Sunday, August 25, 2019 | 18:52 WIB
By : Primus Dorimulu / AB



1634015237342.png

Tony Wenas. (Photo: B1/Primus Dorimulu)

The smelter or concentrate processing plant owned by PT Freeport Indonesia (FI) will operate in December 2023. With the disbursement of US$ 150 million or around Rp 2.1 trillion, the construction of the smelter in Gresik, East Java, has reached 3, 8%, namely, among others, feasibility study, engineering, amdal, location rental fees, and land preparation. The total investment for processing the concentrate into cathode and anode reaches US$ 3 billion.

"Freeport has received loan commitments from 11 banks and this is the first loan since the company started operations," said PT FI President Director Tony Wenas to Beritasatu.com when inspecting the location of the smelter in the industrial area built by the Java Integrated Industrial and Ports Estate (JIIPE) in Gresik. , Saturday (24/7/2019). Three of the 11 creditor banks are domestic banks.

Processing 2 million concentrates supplied from Mimika Regency, Papua, the production capacity of PT FI's smelter plant reaches 550,000 tons of cathodes. Currently, said Tony, concentrate production is declining, because ore production in open pit mining is running low and will run out this year. The years 2020 to 2022 are a transition period from open pit mining to underground mining.

Concentrate production will return to normal in 2023 when the smelter plant operates. At that time, the production of 3 million tons of concentrate will be entirely produced from underground mining. As much as 1 million is processed by PT Smelting and 2 million tons is processed by PT FI itself.

As the 25% shareholder of PT Smelting in Gresik, PT FI actually already owns a smelter factory . However, the concentrate production of PT FI during normal times reaches 3 million tons per year, while the concentrate produced at PT Smelting is only 1 million tons. In accordance with a special mining business permit (IUPK), PT FI is required to build a domestic smelter, mineral refining and processing company within five years of the permit being granted.

Unlike the contract of work (KK) regime, the IUPK regime prohibits the export of raw materials. Mineral products exported must be processed domestically. Starting from the time the permit was granted, according to Tony, the smelter must be operational by the end of December 2023 or five years after obtaining the IUPK.

"We believe that the construction of the smelter can be done on time and will operate in December 2023," said Tony.

Overall, the smelter construction process has reached 3.8%, but land maturation has reached 46% and engineering design has reached 76%.

Tony believes that the smelter construction will be on target, also because of the strong support from the government. A creditor bank is also ready to disburse a loan of US$ 3 billion.

"This is our first time, Freeport Indonesia has borrowed," said PT FI Deputy President Director Orias Petrus Moedak on the same occasion.

Capacity Sofar, 1 million concentrates produced by PT FI are processed by PT Smelting, a joint venture company with Mitsubishi in Gresik, East Java. The majority of shares in this company are controlled by Mitsubishi and its Japanese partners, while PT FI is 25%. In addition to processing concentrate from PT FI, PT Smelting also processes 100,000 tons of concentrate from PT Amman Mineral, formerly PT Newmont.

In 2019, said PT Smelting President Director Hiroshi Kondo, the company processed 1.1 million tons of copper concentrate and produced 291,000 tons of cathode, 1.04 million sulfuric acid, 805,000 tons of copper slag, 31,000 tons of gypsum, and 2,000 tons of anode sludge.

Although it has only enjoyed dividends in the last three years after 23 years of operation, Kondo said, his party has contributed to Indonesia. PT Petrokimia Gresik's operation, which is located next door, receives a supply of 1.04 million sulfuric acid from PT Smelting.

Meanwhile, around 800,000 tons of copper slag is used as raw material for the cement industry, helping the operations of cement companies in the Gresik area. With an initial investment of US$ 624 million, PT Smelting has now produced cathodes worth US$ 20 billion.

"One of our considerations for investing in smelters in Indonesia is the large Indonesian market. In fact, most of the cathodes must be exported because of the small absorption capacity of the domestic industry," said Tondo to the capital's mass media leaders at his office in Gresik.

PT Smelting cathodes are exported to Malaysia, Thailand and Vietnam. If the manufacturing industry in Indonesia is strong enough, copper marketing will be fully absorbed in the country. Copper, among others, is needed by the automotive industry, manufacturers of air conditioners and various types of electronics, and construction for electrical installations. The development of electric cars will require a lot of copper.

The final products of the smelter company are cathode or copper, sulfuric acid, copper slag, gypsum, and anode sludge. Inside the anode mud is gold, silver, and other precious metals. By choosing a location in Gresik, not Papua, all smelter products can be marketed and do not damage the environment. The JIIPE industrial area also has its own port to facilitate exports.

The anode sludge from the PT FI smelter plant will be purified by a company. At this plant, the sludge is processed into pure gold, pure silver, and a mixture of platinum, palladium, selenium, and other metals.

From the ore or ore that is mined, PT FI produces concentrate. "In fact, the added value of copper concentrate has reached 95%. If it is processed through a smelter , the added value will only increase by 5%," said Tony.

The added value of copper concentrate is much different from the added value of nickel concentrate which is below 50%. "However, the construction of the smelter has become our commitment," said Tony.

Concentrate from PT FI has received a high enough price on the London Metal Exchange (LME) which is already quite high. This is a testament to the high added value of concentrate.

The value of gold in concentrate is more than 30%. The largest is copper. PT FI's smelter plant will produce 550,000 tons of copper, 30-60 tons of gold, around 120 tons of silver per year.

 

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