A South Korean consortium led by LG has withdrawn from a major investment project to develop a battery value chain in Indonesia. According to media reports, the decision concerns a project worth equivalent to approximately 8.45 billion US dollars. Among the participants were LG Energy Solution, LG Chem and LX International as well as Indonesian state-owned enterprises.
Complete supply chain planned
The Indonesia Grand Package project was launched in late 2020 and aimed to establish a complete supply chain for electric vehicle batteries. The plan was to integrate all stages of production, from raw material extraction and processing of nickel and other materials to the manufacture of cathodes, precursors, and battery cells.
Changing market conditions
LG cited changing market conditions and declining global demand for electric vehicles as reasons for the withdrawal. Despite the decision, LG said it intends to continue its existing operations in Indonesia, particularly as part of its HLI Green Power joint venture with Hyundai. The cell production facility there is already operational and will be expanded in the future. Meanwhile, the Indonesian authorities continue to be open to foreign investors and emphasize the economic potential of the nationʼs nickel deposits.
