CRU: Indonesia emerging as low-cost hub for lithium refining

By Adianto P. Simamora

Indonesia is becoming one of the most competitive countries for lithium refining thanks to low labor and energy costs, according to an assessment by CRU presented at the Petromindo’s Metal Outlook Conference recently.

CRU Battery Materials Analyst Ruiming Zhang said Indonesian refineries, such as PT Chengtok, now have operating costs that are lower than those in Australia and close to those in China.

He said that the main advantages come from cheaper labour, lower electricity costs and closer links to established Chinese processing technology.

“We believe that Indonesia has the potential to become an important lithium chemical producer outside China,” Zhang said.

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CRU’s data shows that Indonesia could become a major refining hub for lithium chemicals used in electric vehicle (EV) batteries.

However, said Zhang, Indonesia still faces several challenges as the country does not have its own lithium ore supply and must import all feedstock.

Refiners also depend heavily on Chinese technology, and high reagent costs remain a concern, he said.

Zhang explained that global lithium supply remains in surplus, meaning the market is not facing a structural shortage. But recent policy changes in China and growing geopolitical tensions could push more investors to seek refining capacity outside China—creating opportunities for Indonesia.

Editing by Reiner Simanjuntak