Multiple lithium battery companies have landed in Indonesia

The lithium war in Malaysia is still ongoing, and Chinese lithium battery companies are opening up a second battlefield in Indonesia.

It is reported that two major lithium battery projects are preparing to land in Indonesia in the near future.

Firstly, after LG New Energy withdrew its project in Indonesia, Huayou Cobalt filled the gap. On April 23, the Indonesian Minister of Energy and Mineral Resources stated that Huayou Cobalt would replace LG and cooperate with the Indonesian state-owned holding company to become a strategic investor in Indonesia's important electric vehicle battery project.

Huayou Cobalt has many projects in Indonesia. In 2024, it cooperated with Vale Indonesia and Ford Motor to build the 120000 ton nickel metal Pomalaa project, which started construction in Q1 of this year; Another project, Sorowako, is also steadily progressing; The Huaxiang 50000 ton nickel sulfate project with lithium battery material layout has been completed and put into trial production.

Secondly, CATL plans to seek a $1 billion loan for the construction of its Indonesian subsidiary, with plans to build a battery factory in Karawang, West Java Province. According to foreign media reports, CATL has established a battery cell joint venture in Indonesia, which is jointly invested by CATL and four Indonesian state-owned enterprises. The investment amount is about 8.4 billion yuan, and the plan is to build a 15GWh battery cell factory, which is expected to operate in 2027.

These two major events indicate that Indonesia will be another focus for domestic battery factories to go global in the coming years. Qidian Lithium also believes that the battery industry chains in Indonesia and Malaysia will complement each other in the future, becoming the headquarters for Chinese companies to go global.

In addition to the two major projects mentioned above, the following projects have been launched in Indonesia from last year to this year:

In February of this year, the second phase of the Indonesian lithium source project under Lithium Source Technology started construction; On April 20th, the 120000 ton lithium iron phosphate project in Indonesia, undertaken by China Construction Fourth Engineering Bureau, started construction; Last November, Greentown signed an agreement with Vale Indonesia to build a green smelter in Central Sulawesi province, Indonesia; Last October, Zhongwei Corporation announced the construction of a $10 billion battery material project in Indonesia; Last August, the Betray Negative Electrode Material Project in Indonesia, undertaken by China Construction Fourth Engineering Bureau, was put into operation. The first phase of the project had an investment of approximately RMB.

From minerals to the entire industry chain

The development paths of the battery industry in Indonesia and Malaysia are different. Firstly, mineral companies have taken root in Indonesia and gradually gained the discourse power in the Indonesian mineral market. Then, after numerous games, Korean companies have given up their share, and Chinese companies have become the mainstream of Indonesia's new energy market.

Indonesia has abundant nickel and cobalt resources, which make it a key battleground for major new energy forces. China's Huayou Cobalt/Qingshan Holdings and South Korean companies are also laying out their plans here.

For example, in 2022, LG's large-scale project landed here, carrying out the entire process from nickel mining to battery production. However, with changes in the market environment, LG New Energy and many allies are clearly unable to cope, which also provides opportunities for Huayou Cobalt.

The advantage of Chinese enterprises lies in their ability to make relevant strategic adjustments in response to Indonesian official policies. For example, in 2014, the government adjusted the policy to prohibit the export of raw ore and strengthen local processing. In this change, Qingshan Holdings and Huayou Cobalt have optimized their technology and firmly grasped the mining rights of Indonesian nickel ore.

With the foundation of nickel mining, Chinese new energy enterprises can carry out a full industry chain layout in Indonesia.

Behind the clustering of lithium battery companies

At the same time as the rise of new energy vehicles and energy storage, lithium battery material companies are accelerating their layout in Indonesia. In 2023, Longpan/Greenmei/Zhongwei/Huayou/Shengxin Lithium Energy have taken relevant actions.  

At present, there are two types of new energy forces in Indonesia, one is the battery materials camp mentioned above, and the other is the lithium battery camp, including Ruipu/Ningde/Yiwei, etc.

Indonesian President Joko Widodo once proposed a plan to make Indonesia a global maritime pivot, utilizing its mineral and geographical advantages to build Indonesia into a heavyweight player in the fields of new energy and minerals, which happens to be the first choice for domestic enterprises to establish themselves overseas.

Exchanging technological advantages and industrial chain advantages for the Indonesian market has become a common path for Chinese companies to go global, especially effective in Indonesia.

Not only that, building a factory in Indonesia is also beneficial for Chinese battery factories to break free from restrictions on lithium batteries in Europe, the United States, and other places. There are many benefits to "Made in China" on Indonesian land, and using Chinese technology combined with ASEAN production may spark a different kind of spark.

In addition, the Indonesian automotive industry chain also needs the assistance of Chinese battery factories to complete the electrification transformation. In the Indonesian market where Japanese cars almost dominate, BYD is also leading a group of new energy companies to expand. It is also worth noting that the Indonesian two wheeler and small power markets are equally large, so cylindrical batteries suitable for two wheelers and small power may win more opportunities in the Indonesian market in the future.