Minister of Investment Meets with LG Energy Solution CEO to Discuss Mega Collaboration Project with State-Owned Enterprises

Thursday, 03/08/2023 21:06 WIB

Jakarta, CNBC Indonesia – The Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia held a meeting with Chief Executive Officer (CEO) of LG Energy Solution Young Soo Kwon to discuss the continuation of the mega collaboration project between State-Owned Enterprises (BUMN) and the LG Consortium.

Minister Bahlil expressed his appreciation to the parties who have agreed and are committed to continuing the project grand package This collaboration was hampered after the issuance of the Inflation Reduction Act (IRA) in the United States which affected the supply chain for raw materials for electric vehicle batteries in the world.

The decision to continue this project, said Bahlil, showed consensus and a desire to achieve common goals between the Indonesian government and the LG Consortium in the context of downstreaming natural resources, increasing added value to the Indonesian economy and creating jobs.

“The government appreciates LG’s commitment to continuing the realization of investment in the electric vehicle battery ecosystem in Indonesia, the Ministry of Investment is committed to continuing to oversee the licensing process and facilitate LG’s investment in Indonesia so that it can be realized quickly and provide benefits, especially for the two countries of Indonesia and Korea. This project was initiated as a result of the meeting. the two heads of state of Indonesia and Korea since 2019,” said Bahlil.

LG Energy Solution CEO Young Soo Kwon revealed that currently, the consortium is ready to continue discussions on establishing the company which is expected to obtain approval from the board of directors of each member of the consortium so that construction is possible in 2023.

“LG appreciates the support from the governments of Indonesia and South Korea. Without government support it is impossible to reach an agreement to start realization. Currently, LG has completed the most difficult thing in negotiations between consortiums, namely determining shareholders in joint ventures in each supply chain. After reaching an agreement In terms of share structure, the LG consortium believes negotiations will be much easier and targets to start construction of the cathode plant in 2023,” said Kwon.

Providing the same support, President Director of PT Antam Nico Kanter revealed that Antam continues to be committed to making the best efforts and will try to accommodate the needs of this project. One of the main keys in realizing the success of this mega project is good collaboration and communication from all parties.

“Antam and the entire BUMN consortium involved in the LG electric vehicle battery (grand package) ecosystem development project, have the same commitment to accelerate and are ready to negotiate to provide benefits for both parties,” said Nico.

The US$9.8 billion or Rp142 trillion mega project is a collaborative project between the LG consortium and the BUMN IBC consortium, which consists of LG Energy Solution, LG Chem, Huayou, LX International, Posco Future M, Antam and IBC.

The initial steps for this project started with the construction of a battery cell factory in Karawang with a total investment of US$ 1.1 billion where the factory will commercially produce 10 GWh of battery cells in April 2024.

Furthermore, the mega project investment will be continued with the construction of a smelter, precursor and cathode factory, as well as the mining cooperation currently owned by ANTAM in Buli, Halmahera

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