Indonesia moves to open battery precursor plant at Setangga SEZ

Indonesia has taken another step in its mineral downstreaming agenda with the inauguration of a battery precursor materials facility operated by PT Anugerah Barokah Energi Baru (ABEB) at the Setangga Special Economic Zone (SEZ) in Tanah Bumbu, South Kalimantan, as reported by Indonesia Business Post.

The plant was officially opened on January 13 by Minister of Defence Sjafrie Sjamsoeddin, who highlighted the project’s broader significance for both industrial development and national security.

PT ABEB is affiliated with China’s CNGR Group and operates in partnership with Jhonlin Group, an Indonesian conglomerate controlled by businessman H. Andi Syamsuddin Arsyad, commonly known as Haji Isam. The company specialises in the production of nickel-based ternary precursors, a key input used in the manufacture of lithium battery cathodes.

Downstreaming linked to defence capability

During the launch ceremony, Sjafrie praised the progress of Indonesia’s downstream processing sector, noting that it delivers tangible benefits beyond economic growth.

He said the industrial processing of domestic natural resources strengthens the country’s economic base while also supporting the development of Indonesia’s domestic defence industry.

According to the minister, battery material production is expected to become a strategic pillar in 2026, supporting technological advancement across multiple sectors, including defence-related technologies. He added that transparent and accountable downstreaming illustrates how industry can directly contribute to national defence objectives.

Key role in the global battery supply chain

The ABEB facility produces ternary precursors, an intermediate material that plays a critical role in the global lithium battery supply chain, particularly for electric vehicles and energy storage systems. The plant has a designed annual capacity of up to 20,000 tonnes.

Acting Secretary General of the National SEZ Council, Rizal Edwin Manansang, said Setangga SEZ has recorded robust investment momentum. By the third quarter of 2025, realised investment at the zone had reached IDR4.7 trillion ($277mn), generating 3,001 jobs and placing Setangga among Indonesia’s fastest-expanding SEZs last year.

He added that ABEB’s operations are expected to amplify these gains through broader economic spillovers, including higher export values, employment growth, expansion of supporting industries and logistics services, technology transfer, and improvements in workforce capability.

Long-term investment and employment targets

Setangga SEZ has been designated as a future industrial hub for central Indonesia, with planned cumulative investment of IDR67.69 trillion ($4bn) and the potential to create more than 78,000 jobs by 2053, Rizal said.

The launch of the ABEB plant aligns with Setangga SEZ’s development strategy as an integrated industrial zone focused on value-added mineral processing and new energy, while supporting Indonesia’s national downstreaming policy.

CNGR Chairman Deng Wei Ming said that once fully operational, the facility is expected to generate around 1,000 direct and indirect jobs.

He reaffirmed CNGR’s commitment to regulatory compliance, clean production methods, environmental protection and sustainable development, adding that the company would continue working closely with Indonesian stakeholders to support the growth of the country’s new and renewable energy sector.

Supporting the Golden Indonesia 2045 vision

With industrial activity accelerating, Setangga SEZ is projected to become a key contributor to Indonesia’s Golden Indonesia 2045 vision. The expansion of value-added processing industries in the zone is expected to support economic transformation by increasing resource value, strengthening manufacturing capacity, and deepening Indonesia’s role in global supply chains for future-oriented energy and technology industries.

The inauguration was attended by senior government officials and stakeholders, including Minister of Agriculture Andi Amran Sulaiman, Deputy TNI Commander General Tandyo Budi Revita, and South Kalimantan Governor Muhidin.