Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan inaugurated the start of the first phase of production and expansion plans for the production facility for cathode materials for electric vehicles (EV) batteries based on Lithium Iron Phosphate (LFP) by PT LBM Energi Baru Indonesia, in the Kendal Industrial Area, Central Java. This is the result of a strategic investment partnership between the Indonesia Investment Authority (INA) Consortium and Changzhou Liyuan New Energy Technology Co., Ltd., one of the world’s largest LFP producers. The investment is expected to play an important role in meeting global demand for LFP batteries, which is driven by the increasing penetration of electric vehicles (EVs) worldwide.
“We must create added value in our own country, build a strong downstream industry, and position ourselves as a key player in the global supply chain,” said Luhut, quoted from the official statement of the Coordinating Ministry for Marves, Tuesday (8/10/2024).
The planned joint investment is US$200 million to increase production capacity from 30,000 tonnes in phase I to 90,000 tonnes in phase II, which is expected to start in 2025. LFP is one of two key chemistries in lithium-ion batteries, alongside Nickel Cobalt Manganese (NCM). Known for its cost-effectiveness, LFP is well-suited for electric vehicles and energy storage systems.
Bain’s EV Battery Ecosystem study1 shows that global battery demand is expected to grow about four-fold between 2023 and 2030, driven by increasing EV adoption, positioning LFP to play a key role in meeting that demand. By 2030, NCM is projected to account for about 50% of lithium-ion battery demand, while LFP is expected to account for about 35%, with both expected to remain central to future battery industry growth.
The strategic partnership focuses on LFP cathode materials that represent the highest added value in the battery value chain, allowing the facility to capitalize on the opportunities presented by this growing market. By 2030, Indonesia is expected to serve a market worth around US$10 billion in LFP cathode active materials, making a significant contribution to the global transition to clean energy. This investment is also a testament to Indonesia’s attractiveness as a country for supply chain downstreaming.
Meanwhile, Changzhou Liyuan CEO Shi Junfeng stated that PT LBM Energi Baru Indonesia is the first cathode producer outside of China, whose initial operation is of great significance to enhancing the security of supply of the global new energy supply chain.
In addition, this cooperation is also another important achievement of the comprehensive strategic cooperation between China and Indonesia. The proposed strategic investment in LBM New Energy (AP) Ptd. Ltd. also fully demonstrates INA’s forward-looking vision and long-term commitment to the global new energy industry.
“This project will enable Changzhou Liyuan and INA to achieve closer strategic cooperation. In the future, Changzhou Liyuan will make meaningful contributions to the development of Indonesia and the global new energy industry,” he said.
October 8, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20241008133849-4-577871/ri-china-makin-akrab-garap-baterai-litium-bukti-terbaru-dari-kendal)