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Indonesia and US presidents to address critical minerals partnership
FILE PHOTO: Indonesian President Joko Widodo greets U.S. President Joe Biden upon his arrival for a mangrove planting event at Ngurah Rai Forest Park, on the sidelines of the G20 summit in Denpasar, Bali, Indonesia November 16, 2022. Dita Alangkara/Pool via REUTERS/File Photo
On Monday, Indonesia and the United States are set to engage in discussions regarding the advancement of a potential minerals partnership, specifically focusing on boosting the trade of nickel—a crucial metal for electric vehicle (EV) batteries.
The upcoming meeting between Indonesian President Joko Widodo and U.S. President Joe Biden at the White House will explore the next steps that could pave the way for formal negotiations on this partnership.
In September, Indonesia, possessing the world’s largest nickel ore reserves, initiated discussions with the United States regarding a trade agreement for critical minerals in order to secure protections for exports under the U.S. Inflation Reduction Act (IRA).
While a substantial portion of Indonesia’s nickel is currently processed into raw metal, there is a strong governmental push to establish an electric vehicle (EV) supply chain to leverage its abundant nickel reserves for battery material production.
The global market value of the nickel industry is estimated at $33.5 billion in 2022, despite oversupply challenges. With the closure of the sole U.S. nickel mine in a few years and the absence of a domestic nickel smelter, there are concerns about the U.S. achieving Biden’s goal of leading in EV manufacturing.
In March, U.S. legislation guidelines stipulated that EV batteries sold in the United States must incorporate a specific amount of critical minerals to qualify for tax credits. However, Indonesia lacks a free trade agreement with the United States.
Despite the interest in the minerals partnership, the Biden administration remains cautious about environmental, social, and governance standards and is actively evaluating the feasibility of the deal, with plans to conduct further consultations with U.S. lawmakers and labour groups in the coming weeks, Reuters reported.
As well as the clean energy transition, Widodo and Biden will discuss regional security, upholding international law and ensuring a free and open Indo-Pacific.
