In a hearing with House of Representatives Commission VII, which oversees technology and energy policy, an executive of state-owned mining holding company MIND ID, one of four IBC shareholders, explained that 20 percent of the raw materials needed for battery production had to be imported.

“The [options] for corporate action to purchase foreign lithium mines or other means [to secure supply] are still being discussed under the promulgation of a road map,” MIND ID institutional relations director Dany Amrul Ichdan told hearing participants.

Lithium hydroxide accounts for the largest portion of imports for the domestic battery industry with an estimated 70,000 tons shipped into the country per year, mostly from China, Chile and Australia.

Next on the list is graphite, with some 44,000 tons per year supplied by China, Brazil and Mozambique, followed by manganese sulfate and cobalt sulfate with 12,000 tons per year each.

According to the MIND ID document presented to lawmakers, most cobalt supplies come from Congo and Russia, while manganese is predominantly sourced in South Africa, Gabon and Australia.

MIND ID noted that its nickel ore supply, which makes up 80 percent of total battery production materials, was already secured by the inventories of state-owned diversified mining company PT Aneka Tambang (Antam).

IBC was created in March 2021 by four state-owned firms holding 25 percent each, namely MIND ID, oil-and-gas giant Pertamina, electricity monopoly PLN and Antam.

Antam president director Nicolas D. Kanter told lawmakers that no battery factory in the world used only materials from domestic sources. Thus, supply chain management was key to the project’s success.

“It is impossible for everything to be self-sufficient, [there is] no chance for that. That is why supply chain management is important,” Nicolas said.

The supply of raw materials is imperative to sustaining IBC’s cooperation with China’s Ningbo Contemporary Brunp Lygend (CBL) and South Korea’s LG Energy Solution (LGES), the largest and second-largest EV battery producers in the world, according to Nicolas.

The plan is for the SOEs to set up joint venture (JV) agreements with the two foreign investors for each stage of the production chain, with the first to be signed in the fourth quarter of 2022.

“We are still pursuing the JV deals, which are supposed to be signed this year [...] for this matter, we need your assistance,” Nicolas continued.

IBC president director Totok Nugroho told lawmakers that, aside from acquiring overseas mining sites to import materials, technological development could ensure more domestic resources were utilized in a long-term plan.

The main objective of foreign investors was to secure long-term supplies of nickel, he said, as the Russian invasion of Ukraine had left supply chains in shambles.

In return for gaining exclusive access to mining sites through Antam, he added, both foreign firms should invest in the domestic EV battery industry from the mining process up to the battery cell production.

In the planned cooperation with the LGES consortium, codenamed Project Titan, Antam as the majority shareholder in the planned mining JV would supply 16 million tons of nickel ore per year to make battery cells totaling 30 gigawatt hours (GWh), starting from 2024. The total projected investment need is US$8 billion.

Amid concerns about investment, technology and the market situation, Totok said, the SOEs enterprises would only seek large minority stakes in the other JVs, namely four JVs with LGES and five with CBL, while the exact number of shares were still being negotiated between the parties involved.

“This is interesting, because LGES gets into the downstream [business] first, while later on securing the upstream,” Totok said.

In the planned $6 billion cooperation with CBL, codenamed Project Dragon, Antam would supply 18 million tons of nickel ore per year to be converted into 15 GWh worth of battery cells per year, with battery cell production to commence in 2025.

Unlike the plan with LGES, the cooperation with CBL, a subsidiary of Guangdong Brunp Recycling Technology, includes recycling facilities with a capacity to process 20,000 tons a year.

According to IBC, battery cell prototypes utilizing indigenous battery management systems have been created since the beginning of 2022, while progress on a battery cell factory in Karawang, West Java, has reached 45 percent. Once completed, it is to be the largest in Southeast Asia with 10 GWh in annual production capacity.