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Volkswagen, BASF to invest in Indonesia's EV battery sector

Jakarta Globe - April 17, 2023

Jayanty Nada Shofa, Jakarta – President Joko "Jokowi" Widodo is bringing home good news for Indonesia's electric vehicle (EV) ecosystem from his Hannover trip, as German automotive giant Volkswagen eyes the Southeast Asian country's e-mobility battery production.

Jokowi over the weekend met with the top brass of three European firms, namely German chemical producer BASF, French miner Eramet, and Volkswagen.

According to Investment Minister Bahlil Lahadalia, Volkswagen through its battery subsidiary PowerCo told Jokowi of its interest to invest in Indonesia's EV battery ecosystem during the meeting.

The company will team up with miner Vale, US automaker Ford, and Chinese cobalt refiner Zhejiang Huayou Cobalt. The latter three firms recently agreed to work on a nickel processing project in Southeast Sulawesi.

"Volkswagen will work together with Eramet and [Indonesian conglomerate] Kalla Group," Bahlil said in a recorded video statement.

There will also be an upcoming partnership between Volkswagen and mining firm Merdeka Copper Gold.

"The point is that the cooperation revolves around building an ecosystem [of EV] batteries. The partnerships will encompass joint venture investment and supply of raw materials," Bahlil said.

Bahlil, however, did not disclose how much Volkswagen was planning to invest in Indonesia's EV battery sector.

The minister also spoke of BASF's plans to make a $2.6 billion investment in an EV battery ecosystem in North Maluku. BASF will join forces with Eramet to build an EV battery ecosystem that runs on green energy.

Bahlil added, "[the BASF investment] will cover up to battery precursor production. The construction will kick off in late 2023."

The European investors' presence shows that Indonesia is open for investment and is not only attracting Asian businesses, according to Bahlil. He also revealed that the 2024 elections had piqued foreign investors' curiosity.

"Many investors in Europe and anywhere else asked us who would be the next Indonesian leader. They have asked 'will the next president have the same commitment as President Jokowi?'. We have to convince them that Indonesia will be alright, regardless of who the next president is," Bahlil said.

"But that is a challenge that we have to address together. I cannot give false hopes to the investors, one thing for sure is that President Jokowi to this day has consistently taken care of the investors from various countries in the downstream industry, particularly the EV battery ecosystem."

Last month, Ford Motor Co, Vale, and Huayou announced their partnership on a nickel processing project in Pomalaa, Southeast Sulawesi. The Pomalaa Block High-Pressure Acid Leaching (HPAL) project will process Vale's ores from its Pomalaa Block mine to produce mixed hydroxide precipitate (MHP). This project is expected to produce up to 120 kilotons of MHP a year.

Source: https://jakartaglobe.id/business/volkswagen-basf-to-invest-in-indonesias-ev-battery-secto