LG Energy Solution (LGES) of South Korea has exited its US$8.45 billion (HK$65.7 billion) electric vehicle (EV) battery project in Indonesia, prompting the Indonesian government to court China’s Zhejiang Huayou Cobalt as a potential replacement investor.
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Initially launched as a joint venture between LGES and the Indonesia Battery Corporation (IBC), the project was abandoned after LGES cited shifting market dynamics and a less favourable investment climate.
Indonesia’s state-owned Antara news agency reported that the Energy, Mineral and Coal Suppliers Association (Aspebindo) warned LGES’s exit could derail the country’s EV industry road map, hinder technology transfer, and heighten the nation’s dependence on imports.
Aspebindo also underscored the need for Indonesia to bolster its policy framework to stay competitive amid global industrial realignments.
Singapore’s Nanyang Sin-Chew Lianhe Zaobao reported that Huayou is positioned to assume control of the project. Indonesia’s Ministry of Energy and Mineral Resources dismissed concerns over the shift, noting that investor reshuffles are routine in major projects and reaffirming the nation’s goal to become a regional EV manufacturing hub.
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Huayou, however, has taken a cautious stance on the potential takeover.