Indonesia Terminated LG Battery Investment First, Says Investment Minister Rosan
JAKARTA — Investment and Downstream Industries Minister/Head of the Investment Coordinating Board (BKPM) Rosan P. Roeslani has stated that the Indonesian government had already decided not to proceed with the investment from the LG-led consortium. The decision was based on an official letter from the Ministry of Energy and Mineral Resources (ESDM) dated 31 January 2025.
Rosan emphasised that it was not LG and the South Korean consortium that decided to withdraw from the investment first. "It has been said that they (LG) were the ones who pulled out, but to be more precise, it was actually us who made that decision, based on the letter dated 31 January 2025 issued by the Ministry of Energy and Mineral Resources," he affirmed.
He went on to explain the government's reasoning behind issuing the letter. Rosan said negotiations over the EV battery investment with LG and its consortium had dragged on for too long, whilst the Indonesian government wanted the investment realisation process to move swiftly. Meanwhile, China's Huayou had already expressed interest in investing in electric battery development.
"The negotiations had been going on for far too long, whereas we want everything to proceed well and quickly. The negotiations had been running for five years, so it simply wasn't feasible," he said.
"The letter dated 31 January 2025 was sent by Mr Bahlil to the CEOs of both LG Chem and LG Energy Solution. The letter was issued because Huayou had indeed expressed interest in investing," Rosan explained.
According to Rosan, Huayou already possesses the technology for electric battery development, meaning the company would simply need to replace LG as the head of the electric battery investment consortium.
Previously, the South Korean consortium had decided to withdraw its investment project worth US$7.7 billion, or approximately Rp 129.8 trillion (assuming an exchange rate of Rp 16,862 per US dollar), from electric battery development in Indonesia. The consortium comprised LG Energy Solution, LG Chem, LX International Corp, and other partners.
The consortium had previously collaborated with the Indonesian government and state-owned enterprises to build an EV battery supply chain, spanning from raw material procurement through to the production of precursors, cathode materials, and battery cell manufacturing.
Sources from South Korean industry circles indicated that the consortium had decided to withdraw the investment project after consulting with the Indonesian government, citing a shift in the industry landscape, particularly due to a temporary slowdown in global electric vehicle demand.
Rosan emphasised that it was not LG and the South Korean consortium that decided to withdraw from the investment first. "It has been said that they (LG) were the ones who pulled out, but to be more precise, it was actually us who made that decision, based on the letter dated 31 January 2025 issued by the Ministry of Energy and Mineral Resources," he affirmed.
He went on to explain the government's reasoning behind issuing the letter. Rosan said negotiations over the EV battery investment with LG and its consortium had dragged on for too long, whilst the Indonesian government wanted the investment realisation process to move swiftly. Meanwhile, China's Huayou had already expressed interest in investing in electric battery development.
"The negotiations had been going on for far too long, whereas we want everything to proceed well and quickly. The negotiations had been running for five years, so it simply wasn't feasible," he said.
"The letter dated 31 January 2025 was sent by Mr Bahlil to the CEOs of both LG Chem and LG Energy Solution. The letter was issued because Huayou had indeed expressed interest in investing," Rosan explained.
According to Rosan, Huayou already possesses the technology for electric battery development, meaning the company would simply need to replace LG as the head of the electric battery investment consortium.
Previously, the South Korean consortium had decided to withdraw its investment project worth US$7.7 billion, or approximately Rp 129.8 trillion (assuming an exchange rate of Rp 16,862 per US dollar), from electric battery development in Indonesia. The consortium comprised LG Energy Solution, LG Chem, LX International Corp, and other partners.
The consortium had previously collaborated with the Indonesian government and state-owned enterprises to build an EV battery supply chain, spanning from raw material procurement through to the production of precursors, cathode materials, and battery cell manufacturing.
Sources from South Korean industry circles indicated that the consortium had decided to withdraw the investment project after consulting with the Indonesian government, citing a shift in the industry landscape, particularly due to a temporary slowdown in global electric vehicle demand.