Jakarta. South Korea has laid out its wishlist for a better business environment in the mineral-rich Indonesia, citing incentives for nickel-based batteries and policy predictability.

The Asian powerhouse has cemented its presence in Indonesia's nickel value chain thanks to automaker Hyundai's local manufacturing. Its Cikarang plant is now already mass-producing its electric vehicle (EV) model, the iOniq5. Hyundai even runs a joint venture with LG Energy Solution for homegrown battery cells in Karawang.

As investment inflows grow in the strategic sector, Uhm Taeho, counsellor and the political section chief at the South Korean Embassy in Indonesia, recently suggested that Jakarta should roll out incentives for a greater commercial win-win.

“We are looking to the Indonesian government to provide incentives and ease of regulations on nickel-based batteries,” Uhm Taeho told a media workshop in Jakarta on Wednesday, adding that both sides had been engaging in talks.

According to Uhm Taeho, nickel-based batteries are easily recyclable and more environmentally friendly, but they come with a slightly higher price tag. Incentives are expected to slash costs. 

“Hyundai uses nickel-based batteries. Indonesia is a prime producer of nickel. It shows how comprehensive our partnership is.” 

The envoy also pointed to the recent investment deal by EcoPro, the Cheongju-based battery materials producer.

South Korean news outlet Chosun wrote last month on EcoPro’s plan to invest 1.5 trillion won, or around $1 billion, in Sulawesi’s BNSI nickel smelter project. BNSI is a joint venture between mining giant Vale, China’s GEM, and Ecopro. 

Uhm Taeho struck a similar tone when asked about Indonesia’s one-gate export policy. President Prabowo Subianto has ordered centralization of strategic commodity exports in Danantara Sumberdaya Indonesia (DSI), a unit under the sovereign fund. Ferroalloys, which South Korea imports for its steelmaking industries, are subject to this new trade regime.  

"We respect Indonesian government policies," Uhm Taeho said.

"Consistency and predictability of policies are very important for Korean companies to increase their investments. I trust that the government duly reflects [on] that in the process of fine-tuning the policies."

More details on the EV incentives would be out soon, although the announcement had repeatedly faced delays.

Finance Minister Purbaya Yudhi Sadewa has signaled that the government would give a “slightly different treatment” for EVs running on nickel-based batteries versus those using lithium ones. The incentives may also come in the form of government-borne value-added tax.

Indonesia is home to the world's largest nickel reserves, with estimates from the US Geological Survey putting the volume at around 62 million metric tons. Its annual mining production hits the 2-million-metric-ton mark. In recent years, the government has tried to attract foreign investors to build local refineries for the country’s abundant mineral resources.

South Korea contributed roughly $880 million to Indonesia's foreign direct investment inflows in the first half of 2026, putting it in the seventh place behind Malaysia (nearly $1.1 billion).

Indonesia’s trade with South Korea rose by around 6% year-on-year (yoy) to $9.5 billion between January and June 2026. Southeast Asia’s biggest economy clinched a $386.8 million surplus in the first semester, although down by almost 41.9% yoy, Trade Ministry data showed. A bilateral trade deal has granted tariff cuts for many of the shipped goods.

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The workshop was part of the Indonesian Next Generation Journalist Network on Korea program. Hosting this capacity-building program are the foreign policy think tank FPCI and the Korea Foundation.

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