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Jakarta, CNBC Indonesia – The Investment Coordinating Board (BKPM) together with the Ministry of State-Owned Enterprises (BUMN) and related Ministries / Institutions, officially pressed cooperation with the LG consortium of South Korea, for a giant and strategic investment project in the integrated industry of electric vehicle battery cells.
A Memorandum of Understanding (MoU) was signed with LG Energy Solution in Seoul, South Korea on December 18, 2020.
The signing was witnessed by South Korea’s Minister of Commerce, Industry and Energy, Sung Yun-mo. The MoU contains cooperation in giant and strategic investment projects in the integrated electric vehicle battery cell industry with mining, smelting, refining, as well as the precursor and cathode industry.
The director of BKPM, Bahlil Lahadalia, said that the value of the investment plan for this project is US $ 9.8 billion, equivalent to Rp 142 billion, with an exchange rate of Rp 14,500 / US $.
“Indonesia will soon have the hub of the world’s first integrated electric vehicle battery cell industry. The development of this industry will be carried out by South Korea’s electric vehicle (EV) battery company LG Energy Solution Ltd , in collaboration with a consortium of BUMN, “it said in a statement. press conference, this Wednesday (12/30/2020).
“These are numbers [Rp 142 triliun] extraordinary, BKPM notes that there has been no investment in the post-reform period of this magnitude. In the era of the pandemic, almost some countries have this opportunity. Although in the era of the pandemic, there is a lot of interest from investors here, ”said the former HIPMI president.
He explained that the BUMN consortium involved in this project were MIND ID (Inalum) Mining BUMN Holding, PT Aneka Tambang Tbk (ANTM), PT PLN (Persero) and PT Pertamina (Persero).
This investment cooperation project is the result of a follow-up meeting between President Jokowi and President Moon Jae In in Busan in November 2019.
Some of the projects will be located in the Batang Integrated Industrial Zone (KIT), Central Java, which President Jokowi reviewed at the end of last June.
This 4,300-ha industrial estate is a pilot for cooperation between the government and BUMN in the provision of competitive land in terms of price, connectivity, and labor.
The plan is that some of the batteries produced from this project will be supplied to the first electric car factory in Indonesia that already exists and will soon start the production phase.
The development of an integrated electric battery industry is a concrete step in accordance with President Jokowi’s goal of fostering economic transformation towards advanced Indonesia by 2045. Downstream mining is one manifestation of this transformation.
“Indonesia will go from being a producer and exporter of raw materials to becoming a major player in the global supply chain for the electric vehicle battery industry, where batteries play a key role, reaching 40% of the total manufacturing cost. of an electric vehicle, “Bahlil added.
In carrying out the project investment, this joint venture will prioritize cooperation with national entrepreneurs, national entrepreneurs in the regions and local SMEs (Small and Micro-enterprises) that have the capacity and capacity in each supply chain. Therefore, it is expected that it can boost the national economy, which has a positive impact on the regions.
“Therefore, this investment will become a full collaboration model that will involve foreign companies with global reputations, capable BUMNs and strong national / regional private economic players,” Bahlil said.
Another thing that is also part of the memorandum of understanding is to prioritize local products to increase the competitiveness and productivity of national industries. The Indonesian government also ensures that this gigantic investment project will absorb the maximum number of Indonesian workers.
The goal of applying electric vehicles in the world will continue to increase gradually.
In the 2020-2030 period, Asian countries will begin to implement it, including the People’s Republic of China (PRC) (8.75 million vehicles), Thailand (250 thousand vehicles), Vietnam (100 thousand vehicles), Malaysia (100 thousand units vehicles), as well as India (55 thousand units of electric cars and 1 million units of electric motors).
Meanwhile, the goal of implementing Indonesian electric vehicles in 2035 is 4 million units of electric cars and 10 million units of electric motors.
According to BKPM data, South Korea’s investment in 2015-third quarter of 2020 was recorded at USD8.12 billion with 17 thousand projects, 3,162 companies and absorbing 660,555 direct labor.
Despite the fact that in 2020 the world will experience an economic slowdown due to the COVID-19 pandemic, South Korean investment continues to move positively
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