The Indonesian government said last week that it expects to receive up to US$31.9 billion in investments in aluminium and other raw materials through 2026 as part of its ramp-up of the domestic battery supply chain.
A large part of the rationale on focusing upon battery production is Indonesia’s significant supply of nickel. Nickel is a major component in batteries produced for electric vehicles.
Per the government, Kalimantan could receive up to US$12.35 billion, North Maluku could get up to US$9.78 billion, and Sulawesi could get US$9.84 billion in investments in the battery supply chain.
Indonesia’s coordinating minister for maritime and investment affairs Luhut Pandjaitan said at a conference in Jakarta last week that one of the draws to his country is the environmentally friendly North Kalimantan industrial park, which is situated on the island of Borneo. The industrial park, which is expected to be powered by up to 265 gigawatts of hydropower, already has commitments from aluminium smelters.
With this emphasis on new projects, Luhut warned that environmental standards will still be enforced.
“If you don’t comply (with ESG), I will shut down your industry.”
Luhut said that the government will not tolerate improper toxic waste disposal either, including dumping tailings in the ocean.
“Please don’t underestimate the intention of the Indonesian government on the environment,” Luhut concluded.