Investment Minister Denies LG Energy Solution Full Withdrawal from US$9.8 Billion Battery Project
Jakarta, CNBC Indonesia - Investment Minister and Head of the Investment Coordinating Board (BKPM) Rosan Roeslani denied that South Korea's LG Energy Solution had withdrawn from the entirety of Indonesia's US$9.8 billion electric vehicle battery investment project, equivalent to approximately Rp165.3 trillion (at an exchange rate of Rp16,867/US$).
Rosan affirmed that LG had only withdrawn from a portion of the planned projects. The investment agreement originally commenced in 2020, encompassing four planned Joint Ventures (JVs) covering nickel mining, precursor manufacturing, cathode and anode production, battery cell manufacturing, and battery recycling. LG has already realised US$1.1 billion of its investment in the project.
"It was divided into four JVs, and they have already broken ground and completed JV number 4. So the reports yesterday about them withdrawing — it wasn't a complete withdrawal, no. They have already completed JV number 4 worth US$1.1 billion," said Rosan at the Presidential Office on Wednesday (23/4/2025).
Regarding the matter, Rosan also clarified that it was in fact Energy and Mineral Resources Minister Bahlil Lahadalia who first terminated further investment negotiations with LG, opting instead to proceed with other partners.
"Minister Bahlil had already conveyed this. Perhaps I should add that it was said the other side terminated the deal, but more accurately, it was we who terminated it," said Rosan at the Presidential Office on Wednesday (23/4/2025).
He explained this was based on a letter issued by the Ministry of Energy and Mineral Resources dated 31 January 2025. The reason was that negotiations with LG to realise the investment had dragged on for too long, whilst Indonesia wanted the project to proceed as quickly as possible.
"The negotiations had gone on for far too long, whereas we want everything to proceed well and quickly, as negotiations have been ongoing for five years," said Rosan.
"A project simply cannot take that long. That is why Minister Bahlil issued a letter sent to the CEOs of both LG Chem and LG Energy Solution," he added.
This development has also opened the door for Huayou, a Chinese company, to join the consortium and take over LG's role in the US$9.8 billion project.
"The total investment remains unchanged at US$9.8 billion. Huayou has already invested in Indonesia previously, in a very similar field," said Rosan.
According to the former Indonesian Chamber of Commerce and Industry (Kadin) chairman, Huayou had expressed interest in joining the consortium since 2024. Besides Huayou, Rosan also revealed that other companies set to replace LG in the project include Indonesia Battery Corporation and PT Aneka Tambang (Persero) Tbk.
"In fact, Huayou was already part of the LG consortium. So now they are simply becoming the leading consortium partner, that's all," he said.
Rosan affirmed that LG had only withdrawn from a portion of the planned projects. The investment agreement originally commenced in 2020, encompassing four planned Joint Ventures (JVs) covering nickel mining, precursor manufacturing, cathode and anode production, battery cell manufacturing, and battery recycling. LG has already realised US$1.1 billion of its investment in the project.
"It was divided into four JVs, and they have already broken ground and completed JV number 4. So the reports yesterday about them withdrawing — it wasn't a complete withdrawal, no. They have already completed JV number 4 worth US$1.1 billion," said Rosan at the Presidential Office on Wednesday (23/4/2025).
Regarding the matter, Rosan also clarified that it was in fact Energy and Mineral Resources Minister Bahlil Lahadalia who first terminated further investment negotiations with LG, opting instead to proceed with other partners.
"Minister Bahlil had already conveyed this. Perhaps I should add that it was said the other side terminated the deal, but more accurately, it was we who terminated it," said Rosan at the Presidential Office on Wednesday (23/4/2025).
He explained this was based on a letter issued by the Ministry of Energy and Mineral Resources dated 31 January 2025. The reason was that negotiations with LG to realise the investment had dragged on for too long, whilst Indonesia wanted the project to proceed as quickly as possible.
"The negotiations had gone on for far too long, whereas we want everything to proceed well and quickly, as negotiations have been ongoing for five years," said Rosan.
"A project simply cannot take that long. That is why Minister Bahlil issued a letter sent to the CEOs of both LG Chem and LG Energy Solution," he added.
This development has also opened the door for Huayou, a Chinese company, to join the consortium and take over LG's role in the US$9.8 billion project.
"The total investment remains unchanged at US$9.8 billion. Huayou has already invested in Indonesia previously, in a very similar field," said Rosan.
According to the former Indonesian Chamber of Commerce and Industry (Kadin) chairman, Huayou had expressed interest in joining the consortium since 2024. Besides Huayou, Rosan also revealed that other companies set to replace LG in the project include Indonesia Battery Corporation and PT Aneka Tambang (Persero) Tbk.
"In fact, Huayou was already part of the LG consortium. So now they are simply becoming the leading consortium partner, that's all," he said.