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Indonesia reveals $12b plan to create electric car battery giant

Jakarta Globe - October 14, 2020

Rangga Prakoso, Jakarta – Indonesia Asahan Aluminium, the state-owned mining holding company, has unveiled a $12 billion plan to create an integrated electric vehicle battery industry called Indonesia Baterai to spearhead its effort to become a global player in the green energy technology.

The company, also known by its trading name Mining Industry Indonesia (Mind ID), signed up its nickel miner subsidiary Aneka Tambang and the state energy firm Pertamina and utility company Perusahaan Listrik Negara (PLN) to set up Indonesia Baterai, Orias Petrus Moedak, Mind ID's president director, said on Tuesday.

"Mind ID and Antam will handle the upstream mining sector. Meanwhile, the intermediate to downstream products are managed by Pertamina and PLN," Orias said.

He said partners from China and South Korea had expressed their interest to work with the consortium. Orias did not identify the prospective partners citing the discussions that have yet to conclude.

"There are two potential partner companies interested to invest in mining to making battery packs. One project worth $5 billion while the other is $7 billion," Orias said.

"All is being discussed right now, and hopefully, it will conclude soon," Orias said.

He said the projects would draw its funding from shareholder equity, local bank loans, or global bonds as a last resort. "Hopefully, the local banks would support us. It will be a different set of issues we borrow from abroad too often," Orias said.

Mind ID already borrows heavily from abroad to finance Indonesia's takeover of Freeport Indonesia, the country's largest gold miner. In May, the company raised $2.5 billion from selling global bonds to refinance debts and fund the acquisition of 20 percent shares in Vale Indonesia, a nickel producer.

Orias said Indonesia Baterai would build an electric vehicle battery factory in North Maluku or North Konawe, with an estimated $3 billion cost. Mind ID now controlled about 30.4 percent of Indonesia's nickel reserves, ensuring ample raw material availability for the battery plant.

Orias said he hoped other businesses would capture this opportunity to develop Indonesia's electric vehicles industry. "If we make a battery at a reasonable price and then only export them, then we just indirectly subsidize the foreigners," Orias said.

Ridwan Djamaluddin, the director-general of mineral and coal at the Energy and Mineral Resources Ministry, said the government has begun developing the downstream industry.

"We are not only talking here and there but looking for players that can really develop the industry," he said.

Source: https://jakartaglobe.id/business/indonesia-reveals-12b-plan-to-create-electric-car-battery-giant