A South Korean consortium led by LG Energy Solution will invest USD$9bn to build a mine-to-manufacturing battery supply chain in Indonesia. The world’s second-largest lithium-ion battery supplier is looking to reduce its reliance on Chinese suppliers.

The US$9Bn consortium includes the steelmaker Posco, LX International and Chinese company Zhejiang Huayou Cobalt. Local supply chain partners include local mining company PT Aneka Tamban and Indonesia Battery Corporation. The resulting battery supply chain will include smelting and refining nickel, the manufacturing of precursor and cathode materials, and the production of finished cells and battery packs. The deal forms part of a wider trend with LG Energy Solution and others seeking alternatives to China-dominated battery materials processing.

Indonesia has the world’s largest reserves of nickel and provides a timely supply chain alternative to Russian-produced nickel. Russia accounts for around 10% of nickel mine supply, but supply chain disruption and uncertainty around sanctions relating to the war in Ukraine have contributed to recent price inflation and instability.