Illustrative image (Photo: Yonhap News)

Hanoi – A consortium from the Republic of Korea (RoK) led by LG has signed an initial agreement with Indonesia's state-run companies to push for a project worth around 9 billion USD to establish an electric vehicle battery supply chain in the Southeast Asian country, a LG unit said on April 18.

The nonbinding framework agreement was signed between the consortium, consisting of LG Energy Solution Ltd. (LGES), LG Chem Ltd., LX International Corp. and others, and an Indonesia mining company, PT Aneka Tambang, better known as Antam, and the Indonesia Battery Corp. (IBC) in Indonesia last week, LGES said in a release.

Indonesian government officials from the Ministry of Investment and the Ministry of State-Owned Enterprises also attended the signing event.

The project seeks to establish an "end-to-end value chain" for EV batteries encompassing the procurement of raw materials, producing key components, such as precursors and cathode materials and manufacturing of battery cells, LGES said.

Indonesia is the world's largest producer of nickel, a key battery material in terms of reserves and output.

The announcement also comes at a time when battery makers are scurrying to secure the supply of key materials for lithium-ion batteries, primarily nickel whose content level determines battery performance, amid a price surge in raw materials.

"With this project, we expect to be able to enhance the battery business capabilities and profitability by stably securing competitive raw materials," LGES said.