CATL and Indonesian Companies to Jointly Invest Nearly US$6 Billion in an Integrated Manufacturing Project for EV Batteries

published: 2022-04-22 9:30 | editor: | category: News

On April 14, major Chinese battery manufacturer CATL announced that Ningbo Contemporary Brunp Lygend Co. Ltd. (CBL) signed a cooperative framework agreement with Indonesian companies PT Aneka Tambang (ANTAM) and PT Industri Baterai Indonesia (IBI).Together, they will jointly develop an integrated manufacturing project for EV batteries. CBL is a subsidiary of Guangdong Brunp Recycling Technology Co. Ltd. (Brunp), which in turn is a subsidiary of CATL. The project will encompass the main sections of the EV battery supply chain, including nickel mining, nickel processing, production of upstream materials, production of EV batteries, and battery recycling.

The total investment in the project is currently estimated at US$5.968 billion. The related mining, processing, and production operations will be at multiple locations across Indonesia. Based on the announcement and reporting by news outlets, the main production base is will be placed in the FHT Industrial Park in East Halmahera Regency of North Maluku Province.

ANTAM is a mining company, whereas IBI is a battery manufacturing company. Both are essentially government-owned. IBI, in particular, is a joint venture that was recently established by Indonesia Petroleum Corp., State Electricity Corp., National Mining Corp, and ANTAM. The Indonesian government is now actively building a supply chain for EV batteries with the aim of becoming an exporter. According to the Center for Strategic and International Studies, the Indonesian government is targeting a domestic production capacity of 140GWh for EV batteries by 2030.

With the advantage of being one of the world’s major nickel producers, Indonesia now wants to attract investment projects that will promote value-added processing of battery metals and battery production within its borders. Incentives to attract investments from foreign battery manufacturers are complemented by restrictions on the exportation of nickel ores.

Hence, CATL is compelled to set up shop in the country. CATL has submitted a document to the Shenzhen Stock Exchange to notify this project; and website Electrek has obtained a table from the document detailing the six specific investment items of the project. According to the table, there will be a nickel mining operation, two nickel processing operations (respectively based on pyrometallurgy and hydrometallurgy), a material manufacturing operation, a battery manufacturing operation, and a battery recycling operation. CATL’s stakes in these ventures will range from 49% to 70%.

CATL has stated that the integrated manufacturing project in Indonesia will expand the company’s presence in the battery industry, ensure the supply of materials, lower production cost, and expedite the development of the company’s battery recycling business. Commenting on the agreement, Robin Zeng, founder and chairman of CATL, said that the Indonesian project is an “important milestone” in his company’s global expansion and in the cooperation between China and Indonesia. Zeng is confident of the progress going forward.

Luhut Binsar Panjitan, Indonesia’s Coordinating Minister for Maritime Affairs and Investment, said that this very significant agreement will contribute to the building of a domestic EV ecosystem. He expects the project to be implemented successfully because of the collaborations among all parties.

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