On 13 October, the Mining Industry Indonesia (MIND ID) chief executive Orias Petrus Moedak announced that a joint venture called Indonesia Battery Holding would be formed by state miners MIND ID and PT Aneka Tambang (ANTAM), state power utility Perusahan Listrik Negara (PLN) and state oil company Pertamina.
Indonesia Battery aims to be involved in the whole battery value chain, including producing battery minerals and chemicals, manufacturing their own cells, and battery recycling. The company would collaborate with Chinese and South Korean partners on projects valued at US$12Bn.
While there has been a lot of talk and hope that cobalt could be removed from the cathode materials in Li-ion batteries, few doubt the irreplaceable role nickel plays in increasing the energy density of a battery and curbing EV range anxiety. Aware of the growing importance of nickel in EV battery development, Indonesia is building up an EV battery industry as part of their national strategy, aiming to make cells for EVs by 2023.
Indonesia is the world’s largest producer of nickel ore, a key ingredient in producing battery quality nickel sulphate used for manufacturing cathode precursors. The abundance of nickel, however, is only one asset. The Indonesian Government needs to consider other major factors when seeking to become a key player in the global EV battery industry. Ensuring a sizeable initial investment is key to building a Li-ion production facility and Roskill believes the formation of this state-owned company will place Indonesia in a strong position to establish its presence in the market. In addition, the Indonesia Battery venture is targeting integration throughout the downstream battery supply chain. However, advanced manufacturing technology, including the synthesis of high-quality battery materials (precursor, cathode, anode, electrolyte) and battery production, is not in place in Indonesia yet, which creates a critical challenge to the industry development.
As reported by Roskill in a previous news release, two high-pressure acid leach (HPAL) projects in Indonesia have dropped plans to utilise deep-sea tailings placement (DSTP) as a method to dispose of tailings. A third HPAL project now faces rising pressure to follow suit. With DSTP now seemingly removed as the main ESG risk for Indonesian battery-grade nickel supply, attention will likely turn to deforestation and land clearance involved in nickel mining as well as the burning of fossil fuels to power these operations. Despite the clear advantage offered by Indonesia’s abundant nickel laterite reserves, ideal for producing battery-grade products, the country must continue to address rising ESG concerns from stakeholders involved along the EV supply chain. This is especially pressing for EV automotive manufacturers whose inherently environmentally conscious customers are unforgiving of poor ESG practices.