Jakarta. Investment Minister Rosan Perkasa Roeslani clarified on Wednesday that South Korea’s LG Energy Solution did not pull out voluntarily from its $7.7 billion battery ecosystem project in Indonesia, but that the government requested the consortium’s withdrawal after five years of stalled negotiations.

Speaking to reporters in Jakarta, Rosan said the decision to terminate the partnership stemmed from a letter issued by the Energy and Mineral Resources Ministry on Jan. 31, 2025, marking the end of talks that had dragged on since 2020.

“It’s reported that LG decided to withdraw, but in truth, the decision came from our side,” Rosan said, as quoted by Antara.

His statement came in response to a Yonhap News Agency report last week that LG Energy Solution, along with LG Chem, LX International Corp, and other consortium partners, had canceled their planned 11 trillion won investment in Indonesia due to changing global market dynamics and a slowdown in electric vehicle (EV) demand.

Rosan emphasized the government’s urgency to move forward, stating that “the negotiations had gone on for five years without real progress,” prompting the decision to part ways.

In LG’s place, Chinese nickel giant Huayou has taken the lead in the EV battery consortium. The company, which has had operations in Indonesia since 2024 and is involved in major nickel processing in Weda Bay, Halmahera, has shown strong commitment and readiness to invest, Rosan said.

“Why Huayou? Because they’ve already made a significant investment in Weda Bay. They understand the industry and have the capacity to execute this project,” Rosan explained.

Despite the change, Rosan stressed that LG Energy remains an active investor in Indonesia. The South Korean company has completed one of four joint venture projects in the country, with a total investment commitment of $1.1 billion (Rp 18.56 trillion).

“The narrative that LG has pulled out completely is inaccurate. They have already completed the fourth joint venture project under their investment plan,” Rosan concluded.

The Jakarta Globe is awaiting a response from Huayou regarding Rosan’s statements.

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