The Indonesia-China battery deal officially broke ground on Sunday, June 29, 2025, marking the start of a major EV battery ecosystem project valued at US$5.9 billion (IDR96.04 trillion). President Prabowo Subianto led the groundbreaking ceremony in Karawang, West Java, signaling a new era for Indonesia’s electric vehicle industry and nickel downstreaming ambitions.
Prabowo expressed strong support for the project, calling it a national breakthrough. “This project is a breakthrough. An investment of US$5.9 billion will yield an estimated return of US$48 billion—around eight times in added value. This benefit will not only accelerate development in North Maluku, but also bring prosperity to other provinces and the entire nation,” he said, as reported by Bisnis.com.
Dragon Project Launch Marks Major Milestone
President Prabowo’s presence at the Karawang site underscored the strategic importance of the Dragon Project. Developed by Chinese battery firm Ningbo Contemporary Brunp Lygend Co. Ltd. (CBL), in partnership with PT Aneka Tambang Tbk (Antam) and Indonesia Battery Corporation (IBC), the project aims to establish a fully integrated EV battery supply chain.
The groundbreaking event also emphasized the project’s role in supporting renewable energy adoption and reducing reliance on imported fuel. Prabowo noted that the project could save the country around US$58 billion per year in fuel, electricity, and oil import subsidies.
Inside the Indonesia-China Battery Deal
The Indonesia-China battery deal involves the construction of six key subprojects. These include nickel mining (JV1), an RKEF smelter (JV2), an HPAL smelter (JV3), a precursor/cathode plant (JV4), a battery cell factory (JV5), and a battery recycling facility (JV6).
Five upstream and midstream projects, worth US$4.7 billion, will be developed in East Halmahera, North Maluku. The downstream battery cell factory, valued at US$1.2 billion, will be built in the Artha Industrial Hill and Karawang New Industry City in West Java.
Minister of Energy and Mineral Resources Bahlil Lahadalia stated that the first phase would deliver 6.9 GWh per year in production capacity by the end of 2026. “15 GWh is equivalent to batteries for about 250,000–300,000 electric vehicles,” he added, referring to the second-phase expansion target.
National Stake in EV Battery Ecosystem Rises
Currently, Indonesia holds a 51% majority stake in the upstream mining segment. However, its share in the HPAL, precursor, and battery cell joint ventures remains at 30%. President Prabowo has instructed officials to raise this to between 40% and 50%.Bahlil confirmed that Chinese partner CATL responded positively. “I’ve spoken with them about the potential to increase the country’s ownership, and they have no objection in principle,” he said.
Danantara, through holding company MIND ID, is also working to strengthen the state-owned consortium. COO Dony Oskaria explained that any ownership increase would come through capital injections from Antam or MIND ID, not directly from Danantara.“Some actions are taken by the companies themselves, whether as equity, loans, or otherwise. But for this case, it won’t come from Danantara,” he clarified.
EV Battery Ecosystem to Boost Nickel Downstreaming
Business leaders and economists agree that the EV battery ecosystem will boost Indonesia’s nickel downstreaming industry. Apindo Chairperson Shinta Kamdani emphasized its catalytic role.
“The EV battery ecosystem will certainly help and create market incentives for nickel and other mineral downstreaming in Indonesia,” she said. However, she stressed the importance of sustainable practices across the entire supply chain.
Senior economist Muhammad Ishak Razak also highlighted Indonesia’s strategic advantage.“This project can boost exports, create jobs, and drive technology transfer,” he said. With 52% of global nickel reserves, Indonesia has the potential to become a key player in the global battery supply chain.
Sustainability Challenges and Global Standards
Despite strong economic potential, the project faces pressure to meet environmental and governance standards. Ishak warned that HPAL waste and smelter impacts must comply with international ESG benchmarks. “This project is a moment to uphold sustainable mining management principles,” he noted.
He also urged the government to enforce local content requirements and invest in domestic EV producers.“We need to learn from China’s success in developing EVs through joint ventures between foreign and local manufacturers,” he added.
Energy Shift Institute Director Putra Adhiguna stressed that the new plant must aim for high standards.“Global battery production is already in overcapacity, so margins are shrinking. But building a factory outside China remains crucial,” he said. He also noted that 70% of new EVs in China no longer use nickel-based batteries.
Outlook on Indonesia-China Battery Deal
The Indonesia-China battery deal marks a critical step toward building a competitive EV industry and reducing Indonesia’s reliance on raw mineral exports. With sustained investment, higher national ownership, and strict environmental standards, the project could place Indonesia at the center of the global EV battery supply chain.
Source: ekonomi.bisnis.com
Image: studiocasper / Getty Images
