Indonesia Energy (INDO) and a unit of South Korean firm LG Group have signed a memorandum of understanding (MOU) on a $9.8 billion electric vehicle (EV) battery investment deal, the head of Indonesia’s Investment Coordinating Board said on Wednesday.
The deal was signed on Dec. 18 and includes investments across the EV supply chain, the board head, Bahlil Lahadalia, told a news conference.
An official at LG Energy Solution, a unit of LG Group, South Korea’s fourth-largest conglomerate, confirmed it had agreed an MOU but could not provide details or the deal’s value. LG Group in Seoul referred Reuters to its affiliate.
Bahlil said the agreement made Indonesia the first country in the world to integrate the electric battery industry from mining to producing electric car lithium batteries.
“We have signed an MOU for the construction of an integrated electric battery factory from upstream to downstream,” Bahlil said.
“Mines, smelters, precursors, cathodes, cars to recycling facilities will be built in Indonesia,” he said, adding that the project will be located in North Maluku and Central Java.
Under the MOU, at least 70% of the nickel ore used to produce the EV batteries must be processed in Indonesia, he said.
Indonesia aims to start processing its rich supplies of nickel laterite ore for use in lithium batteries as part of a bid to eventually become a global hub for producing and exporting EVs.
Indonesia said earlier this month that U.S. automaker Tesla, will send delegations to Indonesia in January to discuss potential investment in a supply chain for its electric vehicles.