Jakarta. Chief Investment Minister Luhut Binsar Pandjaitan recently said that Indonesia would become the third-largest producer of lithium batteries by 2028, as the Southeast Asian country worked to expand its downstream industry.

“By 2025, we can produce our own lithium batteries. And so we will be the world’s third largest lithium battery producer by 2027 or 2028,” Luhut told the 2023 DBS Asian Insights Forum in Jakarta on Wednesday.

“So don’t look down on Indonesia,” Luhut said.

Government data shows that there is $31.9 billion worth of investment in the pipeline for Indonesia’s battery chain development until 2026. About $12.35 billion will be invested in Kalimantan. Also in the pipeline is investment totaling $9.84 billion in Sulawesi, and the remaining $9.78 billion is in North Maluku.

Indonesia attracted $45.6 billion in foreign direct investment (FDI) last year, and this sets a new high since 2000, according to the government. Indonesia also attributed this high FDI to its downstream industry policy, in which the country favors processing its ores at home for higher added value rather than exporting raw materials.

“Developed countries love us when we export raw ores, but I told them ‘enough is enough’,” Luhut said while adding that Indonesia is now exporting iron and steel, rather than unprocessed ores.

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Indonesia’s full ban on unprocessed nickel ore export came into force in Jan. 2020. The government reported nickel downstream exports stood at $33.8 billion in 2022, of which $14.3 billion were iron and steel exports.

The nickel ore export ban led to the European Union (EU) filing a lawsuit against Indonesia at the World Trade Organization (WTO). The EU feared that the ban could hamper the bloc's stainless steel production. Although the WTO panel ruled in favor of the EU, Indonesia has launched an appeal.

Indonesia is planning to extend this ban to other minerals such as bauxite.

The ban on unprocessed bauxite ores is slated to be in place in June 2023. The Indonesian government is expecting a lawsuit from China. About 90 percent of Indonesia’s bauxite ore exports go to China.