- The United States and Indonesia’s potential minerals partnership is to stimulate trade of the electric vehicle (EV) battery metal nickel.
- Indonesia supplies the world’s largest nickel.
Today, the United States and Indonesia will discuss advancing a potential minerals partnership. This aims to stimulate the trade of the electric vehicle (EV) battery metal nickel. According to sources, the countries will move toward formal negotiations on the partnership when Indonesian President Joko Widodo visits the White House for a meeting with U.S. President Joe Biden today. The sources said the Biden administration is still concerned about Indonesia’s environmental, social and governance standards and examines how a deal might work. The administration also plans further consultations with U.S. lawmakers and labour groups in the coming weeks.
Also, in September, Indonesia, which has the world’s biggest nickel ore reserves, asked the United States to begin discussions for a trade deal for critical minerals. This ensures the covering of exports from the Southeast Asian country under the U.S. Inflation Reduction Act (IRA). Indonesia processes most of its nickel into crude metal; still, the government wants to develop an EV supply chain. This EV supply chain will process the vast nickel reserves into battery materials. Indonesia’s nickel supplies are the world’s largest.
Nickel mining in the country is the cause of heavy deforestation and water pollution. Moreover, Indonesia does not have a free trade agreement with the United States. One of the sources added that the Biden administration is also discussing ways to remove any nickel extracted from Indonesia but processed in China from receiving the IRA credits. The global market value for the nickel industry was $33.5 billion in 2022, though there is an over-supply of the market. The only U.S. nickel mine will close in a few years, and the country has no nickel smelter. This is a risk to Biden’s goal for the United States to lead in EV manufacturing.
Furthermore, the government last year gave nearly $115 million to Talon Metals to partially fund a nickel processing plant. This nickel processing plant in North Dakota will supply Tesla Inc. Talon is seeking permits for its proposed Minnesota nickel mine but has faced opposition from Indigenous people. Many U.S. miners have said the Biden administration should focus more on approving domestic projects than seeking international supply.