President Joko Widodo’s ambition of building out Indonesia’s electric-vehicle supply chain is seeing another step forward with plans for a cathode plant.

Indonesian state miner Aneka Tambang, Indonesia Battery Corporation and a consortium led by South Korea’s LG Energy Solution Ltd. are building the facility as part of a $9.8 billion “grand package” to build battery production onshore, according to a statement by Indonesia’s investment ministry on Thursday.

The Southeast Asian country is the world’s largest source of nickel, a key material for high-performance batteries, and it’s seeking to use that advantage to build out an EV industry onshore. Indonesia has seen a rush of investments into building nickel smelters, followed by plans for a cathode precursor facility. A cathode plant would take the country one notch higher in the value chain.

Construction for the cathode plant will begin as early as this year after the companies resolved the trickiest part of the negotiation involving shareholding, LG Energy Chief Executive Officer Young Soo Kwon said in the ministry statement.

The group of companies are also building a nickel smelter, cathode precursor factory and a $1.1 billion battery cell factory set to start production in April. Investment Minister Bahlil Lahadalia said the plans were set back after the US issued the Inflation Reduction Act, which disrupted the global supply chains for EV battery materials.

--With assistance from Eko Listiyorini.