Following the visit of Indonesian President Joko Widodo to the United States for a meeting with President Joe Biden on November 11, 2023, a Critical Mineral Agreement (CMA) was established. On Sunday (19/11), Minister of Energy and Mineral Resources Arifin Tasrif revealed that with this agreement, Indonesia has the opportunity to supply the long-term demand for electric vehicle batteries in the United States. Minister Arifin explained that one of the minerals focused on in this collaboration is nickel. Nickel has become a critical mineral, particularly after Indonesia's downstreaming efforts faced significant resistance. Indonesian nickel was initially rejected by the United States under the Inflation Reduction Act (IRA), which regulates incentives and subsidies for green energy. However, the raw materials for nickel used in electric battery production from Indonesia are not covered by the IRA. The United States has a substantial demand for nickel as a raw material for electric vehicle battery production. Consequently, Indonesia plays a crucial role in the global nickel supply chain.
Minister Luhut assured that the CMA is a mutually beneficial collaboration between the two countries. Through direct bilateral meetings between the Presidents of Indonesia and the United States, he believes that lengthy negotiations have taken place to support the interests of both nations. The Indonesian government does not prohibit the export of derivative mineral ores abroad. However, these resources are prioritised for downstreaming within the country, especially to meet the needs of the domestic electric vehicle industry. The CMA is seen as a strategic move that positions Indonesia as a key player in the global supply of nickel, supporting the growing electric vehicle market in the United States.
