Exclusive: Talks to be held between US and Indonesia regarding possible deal on EV minerals

By Better Today On Nov 12, 2023

TL/DR –

The United States and Indonesia are discussing a potential minerals partnership aimed at boosting trade of the electric vehicle battery metal nickel. The talks, which will include discussions on the environmental, social, and governance standards in Indonesia, will coincide with Indonesian President Joko Widodo’s visit to the White House. While Indonesia, which has the world’s biggest nickel reserves, is keen on the partnership, the Biden administration has expressed concerns over the environmental impact of nickel mining in the Southeast Asian country.

US-Indonesia potential nickel trade partnership for EV batteries

The United States and Indonesia are in discussions concerning a possible partnership to stimulate the trade of nickel, a crucial metal for electric vehicle (EV) batteries. The negotiations come straight from the offices of U.S. President Joe Biden and Indonesian President Joko Widodo.

Concerns surrounding environmental, social, and governance standards in Indonesia still persist. The administration plans further consultations with U.S. lawmakers and labor groups in the coming weeks. “There’s a lot of work to do before we can formally announce negotiations on a critical minerals partnership,” says inside sources.

Indonesia is home to the world’s largest reserves of nickel ore. In recent talks with the U.S, the Southeast Asian nation expressed interest in a trade agreement for critical minerals. This would enable Indonesian exports to fall under the U.S. Inflation Reduction Act (IRA).

Environmental Impact

The Biden administration has been focusing on ensuring that any potential nickel supply has minimal environmental impact. Indonesia’s nickel supplies have been previously blamed for heavy deforestation and water pollution. Any potential partnership will also consider how Indonesia’s resources are processed in China, with a possible exclusion from receiving IRA credits.

Estimations place the global market value for the nickel industry at $33.5 billion in 2022. Despite the large market value, the nickel market is currently oversupplied, with the only U.S. nickel mine set to close in a few years. This situation poses a threat to Biden’s goal for the U.S. to lead in EV manufacturing.

Last year, the U.S. government granted nearly $115 million to Talon Metals to partially fund a nickel processing plant in North Dakota. This plant is set to supply Tesla Inc, the leading EV manufacturer. Talon is currently awaiting permits for a proposed Minnesota nickel mine. However, this project has faced opposition from Indigenous people, leading to speculations that the Biden administration should focus more on approving domestic projects than seeking international supply.