Electric vehicle (EV) battery startup Britishvolt and VKTR, part of Bakrie & Brothers' auto unit under Indonesian conglomerate the Bakrie Group, said on Tuesday they would develop sustainable nickel refining capacity in Indonesia and look into building a battery plant there.

The deal comes at a time of surging raw materials prices, exacerbated by the Russia-Ukraine conflicts and the international sanctions that have followed it.

The two companies will form a joint venture called Indovolt BV VKTR to provide nickel sulphate, a crucial ingredient for high-performance EV batteries, which will eventually be produced using renewable energy in line with Britishvolt's environmental, social and governance (ESG) goals.

"I am proud to be helping establish a secure supply of nickel to the UK at a time when raw materials are in the spotlight," Britishvolt CEO Orral Nadjari said in a statement.

Indovolt will also look at other countries for potential battery plants. VKTR has been looking for a partner to build a 15 gigawatt-hour (GWh) battery plant in Indonesia.

Indonesia is home to more than 10 percent of global laterite nickel ore reserves, and has harbored ambitions of processing its nickel laterite ore and becoming a global hub for producing and exporting EVs.

Last week, Volkswagen, Huayou Cobalt and Tsingshan Group signed a deal focused on nickel and cobalt raw material production in Indonesia.

Its state-owned Indonesia Battery Corporation and South Korea's LG are also building a battery plant in Indonesia worth $1.2 billion with 10 GWh of capacity.

(With input from Reuters)