Luhut Asks German Firm to Invest in Indonesian Electric Cars



Petir Garda Bhwana

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  • TEMPO.CO, Jakarta - Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan asked German chemical company, Badische Anilter und Soda-Fabrik or BASF, to invest in Indonesia. One of the purposes is to support the domestic nickel-processing sector to supply battery components to the electric car industry.

    Luhut said Indonesia is now one of the world's main sources for low-grade nickel ores or limonite with 0.8 to 1.5 percent, which are needed to produce lithium ion batteries. "About 70 to 80 percent of electric cars' main component, namely lithium batteries, are in Indonesia," Luhut said during a visit to the factory in Germany, November 27.

    Luhut said the government is transforming Indonesia's export characteristics—from exporting commodities to exporting value-added goods. This is expected to stop the old routine of exporting raw commodities and importing them back once they have been processed overseas.

    The minister stressed that he wants to increase nickels value as a component in making electric car components—especially since Indonesia is home to the largest nickel reserves.

    "So, if you want to do business with a competitive price, cheap logistics, eco-friendly, while at the same time helping us alleviate poverty—come to Indonesia," Luhut said. 

    To attract BSF, Luhut promoted the cheap cost of hydropower, which is around 2 to 4 cents per kilowatt-hour.  

    BASF's VP of business management Europe Daniel Schönfelder said his company is one of the world's major player in the electric car battery business. The company, he said, plans to increase nickel proportion in the production of batteries, as a way of boosting the engine's performance.