Indonesia and Australia sign EV battery, visa and climate deals

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EV car battery and engine with detail view at Gaikindo Indonesia International Auto Show (GIIAS) in Jakarta

Indonesia is moving closer to its goal of becoming a regional hub for electric vehicle (EV) battery manufacturing, as it plans to strengthen its partnership with Australia in mining essential minerals. Australian Prime Minister Anthony Albanese and Indonesian President Joko Widodo recently reached several green investment deals during President Widodo’s three-day visit to Sydney, likely his last trip as the leader of Southeast Asia’s largest economy, as he is barred from running for another term after his current one expires next year.

During a joint news briefing, Prime Minister Albanese highlighted the potential of Australia to assist Indonesia in the global transition toward electric vehicles, emphasizing their rich resources and expertise in renewable energy components. One significant move in this direction was the agreement between the local government of Western Australia and the Indonesian Chamber of Commerce and Industry to form a mineral supply chain partnership to attract investments from both countries.

President Widodo has been aiming to increase imports of lithium, a key component in EV battery production, from Australia. The state of Western Australia is responsible for half of the world’s lithium production, while Indonesia holds the world’s largest nickel reserves, another vital element in EV batteries, totalling 21 million metric tonnes, according to the US Geological Survey. Both leaders view this collaboration as a positive development in their bilateral relationship and are keen on fostering a substantive and strategic economic cooperation, particularly in the joint production of EV batteries.

The leaders also discussed boosting cooperation in climate and infrastructure projects. Prime Minister Albanese pledged a A$50 million fund to unlock investments in Indonesian small and medium-sized enterprises focused on climate and clean energy. President Widodo expressed interest in attracting Australia’s private sector and national capital authority to invest in Indonesia’s planned new capital, Nusantara. The 2020 Indonesia-Australia Comprehensive Economic Partnership Agreement further solidified their commitment to enhance trade and investment ties.

To facilitate closer relations and ease travel restrictions, Australia has extended the duration of business visas for Indonesians from three to five years. This move is aimed at fostering a stronger connection between the two countries by removing bureaucratic barriers.

The leaders also discussed regional security concerns, including stability in the Indo-Pacific region, the crisis in Myanmar, and the conflict in Ukraine. They jointly deplored the aggression by the Russian Federation against Ukraine and reiterated their call for compliance with the United Nations’ Charter and international law.

Indonesia expressed its concern regarding nuclear proliferation in the region and reaffirmed its commitment to strengthening the global nuclear non-proliferation and disarmament regime. Jakarta’s view on the Aukus alliance and the Quad has shifted in recent months, with President Widodo urging Southeast Asian countries to view them as partners rather than competitors, emphasizing collaboration and concrete cooperation in the Indo-Pacific region.

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