08 July 2023
Resource-rich Indonesia has been proposing a group of nickel-producing countries that would operate in a similar manner to OPEC. According to an article in the Jakarta Globe last week, Indonesia wants to see a comparable group that would coordinate and stabilise the market for nickel – which is a key ingredient for electric vehicle (EV) batteries.
Investment Minister Bahlil Lahadalia gave media updates on Indonesia’s proposal for such a global nickel cartel, saying that it has had intense talks with some unnamed countries. His comments coincided with President Joko Widodo’s visit to Australia, in which he was accompanied by his trade and economic ministers.
Mr Bahlil refused to disclose the name of the said countries. President Widodo had already pitched the OPEC-style nickel cartel at last month’s G7 Summit in Hiroshima, expressing a preference for refining raw minerals domestically, rather than shipping out unprocessed ores.
Australia would be a logical match for Indonesia in any such partnership. Australia is home to at least half the world’s lithium resources, while Indonesia has the world’s largest reserves of nickel. These are the two critical minerals in the production of EV batteries.
While in Australia, Mr Widodo discussed the potential for becoming its supplier of electric vehicles (EV), as well as the batteries that are needed to run them. As we reported recently, Indonesia intends to build an end-to-end EV supply chain on its own shores, instead of exporting its mineral wealth to China and other foreign countries.
Moreover, it can be said that trade between the two countries is very much under-performing. Although Indonesia is the strongest economy in South east Asia, neither this country nor Australia rank in each other’s top ten trading partnerships. There is much potential to build upon the bilateral relationship’s existing foundations, including the flagship Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), RCEP and the ASEAN-Australia-New Zealand Free Trade Agreement.
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