On 1 December 2020, LG Chem launched LG Energy Solutions as a new subsidiary company. The same month, LG Energy Solutions signed an MoU with the Indonesian government for EV-related investments, as per a report from koreatimes.co.kr.
Kim Jong-Hyun, President, LG Energy Solutions, Sung Yun-mo, Minister of Trade, Industry and Energy (S. Korea), and Bahlil Lahadalia, Chairman, Indonesian Investment Coordinating Board, attended a closed-door meeting in Seoul last month, and the MoU was signed there. LG Energy Solution has confirmed the signing of the MoU and said that it was “a non-binding MoU regarding local investment.”
The MoU LG Energy Solution has signed with the Indonesian government involves starting a number of battery-related businesses, including mining raw materials as well as producing battery cells. The net value of the projects is expected to be in trillions of won (KRW 1 trillion = approx. USD 921 million). LG International and POSCO will be stakeholders in these projects.
The archipelago is rich in Nickel, and its government banned Nickel exports in January 2020 to drive its local processing. China’s CATL reportedly also plans to set up an EV battery plant in the country, with an investment of $5 billion. Hyundai is likely to form a joint venture with LG Energy Solutions for its EV business in Indonesia this month. The company is exploring manufacturing EVs at its upcoming factory in Indonesia that it expects to be operational from the second half of 2021. The annual production capacity of the Indonesian Hyundai factory will be 2.5 lakh units.
Reports say that Tesla is also considering investing in Indonesia and plans to send a delegation for discussions this month.