Revving Up EV Potential: The United States and Indonesia are set to discuss plans for a potential minerals partnership, focusing on the electric vehicle (EV) battery metal nickel. Indonesian President Joko Widodo‘s visit to the White House on Monday will pave the way for discussions on formalizing the partnership, aimed at stimulating the trade of nickel—a key component in EV batteries.
However, the Biden administration remains cautious, citing concerns about environmental, social, and governance standards in Indonesia.
Negotiations will address how a potential deal could work, with the administration planning consultations with lawmakers and labor groups in the coming weeks. While Indonesia, possessing the world’s largest nickel ore reserves, seeks a trade deal for critical minerals, the Biden team emphasizes the need for environmentally responsible nickel production.
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The focus is on ensuring that any nickel supplied meets stringent environmental standards. Indonesia’s nickel industry has faced criticism for environmental impact, including deforestation and water pollution. Discussions also include ways to exclude nickel processed in China from receiving U.S. Inflation Reduction Act (IRA) credits.
The global nickel industry, valued at $33.5 billion in 2022, faces oversupply challenges. With the only U.S. nickel mine set to close soon, the Biden administration aims to position the country as a leader in EV manufacturing. Financial support to companies like Talon Metals for nickel processing plants underscores this ambition.
However, opposition from Indigenous groups and calls for domestic project approvals add complexity to the administration’s EV supply chain goals. As the US-Indonesia talks unfold, the potential nickel partnership holds promise but underscores the need for careful consideration.