April 29, 2025 | 06:37 pm
TEMPO.CO, Jakarta - A South Korean consortium led by LG Energy Solution has officially withdrawn from the electric vehicle (EV) battery ecosystem development project in Indonesia. The total investment was valued at 11 trillion won, or around US$7.7 billion (approximately Rp129 trillion).
According to a report by Yonhap News Agency on April 18, 2025, the consortium included LG Energy Solution, LG Chem, LX International Corp, and several other partners. The group had previously signed a cooperation agreement with the Indonesian government and state-owned enterprises (BUMN).
"Considering market conditions and the investment environment, we have decided to exit the project," said an official from LG Energy Solution.
However, Indonesia’s Minister of Investment and Head of the Investment Coordinating Board, Rosan Perkasa Roeslani, stated that the decision to end the agreement actually came from the government’s side.
"In fact, to be more precise, we made the decision based on the letter on January 31, 2025," said Rosan during a press conference at the Presidential Office in Jakarta on Wednesday, April 23, 2025.
The project was a key part of Indonesia’s strategy to develop its electric vehicle battery ecosystem, which aligns with the country's broader nickel downstream policy aimed at increasing the value of its nickel exports and building a strong downstream industry.
However, the aggressive push for nickel-based industrialization has raised concerns over environmental damage. Nickel mining activity in Indonesia has surged in recent years.
According to Greenpeace Indonesia, as of 2023, open-pit nickel mines covered 45,588 hectares, with 26,837 hectares leading to deforestation and 16,223 hectares classified as illegal.
Iqbal Damanik, Forest Campaigner at Greenpeace Indonesia, noted that the expansion of mining operations has grown significantly since 2016.
"If we look from 2016 to 2023, it increased, even up to 600 percent," he told Tempo on Monday, April 28, 2025.
According to Iqbal, the data is generated from the analysis of nickel mining concession areas that have boundaries or polygons. From the map, Greenpeace identified open areas within the concessions used for mining activities, such as roads and voids or former mining excavations.
"From there, we calculated how much deforestation and how large the voids were," he said.
Iqbal added that the direct deforestation recorded in this report refers to the loss of natural forest cover due to mine openings. "So it's not just deforestation that is considered the cover lost within the concession or forest area, but from the natural forest in the nickel opening," Iqbal said.
The same report also revealed that Sulawesi is the area with the highest concentration of nickel mines, reaching 76.1 percent of the total national open mining area. By province, Southeast Sulawesi recorded the largest open nickel mining area, followed by Central Sulawesi and North Maluku.
Meanwhile, Morowali regency becomes the area with the widest nickel mining activity at the regency level.
Greenpeace also mentioned that 35.6 percent of the total mapped nickel mines are classified as illegal, located outside official concession areas or within forest areas without forest area borrowing permits (IPPKH).
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