Indonesia to lead SEA battery manufacturing by 2030

Indonesia is on track to become the largest lithium-ion battery and component manufacturing hub in Southeast Asia. This is thanks to its abundant raw material resources, including nickel and cobalt, and investments from global companies.
Indonesia has long been known for its wealth of raw mineral resources, with nickel being the main draw for manufacturers looking to set up shop domestically. As of 2021, 25% of the world’s known nickel resources are located in Indonesia, which has enabled the country to become the largest global producer of Class 2 nickel at more than 1 million metric tons.

In the past decade, Indonesia has shifted its focus to Class 1 nickel production, which is used in the battery industry. While Indonesia is within the top-ranked countries for this type of nickel, it still lags behind Canada, Australia, and China in terms of mining capacity, currently at around 100,000 tons. By 2027, however, the country is expected to reach nearly 195,000 tons, overtaking Canada and Australia.

In addition to its strength in mining, Indonesia is now looking to expand its battery-grade chemicals refining capacity. While it currently has around 800 tons of manganese sulfate capacity, several new projects are expected to come online within five years, significantly increasing the country’s refining capabilities.

Indonesia’s lack of lithium reserves is an obstacle to its growth, as the country does not have access to the same resources as other powerhouses such as China, Canada, and Australia. However, several local and global mining companies have committed to expand their nickel mining operations in Indonesia, as well as build high-pressure acid leaching facilities to produce nickel and cobalt intermediates.

Furthermore, companies such as CATL, LG Energy Solutions, Tsingshan, BASF, Zhejian Huayou Cobalt, and Posco have all announced plans to invest in manufacturing facilities that will process and refine nickel and cobalt and produce cathode active materials and precursors in Indonesia. These investments are expected to bring 25GWh of lithium-ion cell manufacturing capacity to the country by 2025, which could be expanded to 80GWh by 2030.

The Indonesian government is also aiming to have at least 140GWh of cell manufacturing capacity by the end of the decade, and is in negotiations with several other companies for investments along the battery value chain.

With these developments in the works, Indonesia is on track to become the largest lithium-ion battery and component manufacturing hub in Southeast Asia by the end of the decade.

Source: Net-Zero Transition: Opportunities for Indonesia | BloombergNEF

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Bar chart titled "Figure 61: Proposed lithium-ion battery cell manufacturing capacity in Southeast Asia" by BloombergNEF. The chart shows projected capacity (GWh) by country (Vietnam, Thailand, Malaysia, Indonesia) and by company (VinES, GPSC, EA, SAMSUNG SDI, LG Energy Solution, CATL) for 2025 and 2030.
Source: Net-Zero Transition: Opportunities for Indonesia | BloombergNEF
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