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Concerns rise over constitutionality of Tesla's $5b Chinese deal in Morowali
Despite the government's hopes to gain "economic benefits" from Tesla's multi-billion nickel investment in Sulawesi, a constitutional economist has pointed out that the 'unconstitutional' deal involves two Chinese firms reselling Indonesia’s natural resources.
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President Joko Widodo (left) speaks with Tesla and SpaceX founder Elon Musk on May 14, 2022 at Tesla’s headquarters in Texas, the United States. (The Jakarta Post/Twitter)
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oncerns continue to rise over Tesla’s plan to purchase Indonesian nickel on reports that the American automotive giant helmed by Elon Musk is ready to invest Rp 74.5 trillion (US$5 billion) in two Chinese companies in Morowali, Central Sulawesi.
During its annual shareholders’ meeting in September 2020, Tesla declared that it would follow good business practices by not polluting the environment and paying more attention to the social aspects of its operations.
However, the company’s move to buy raw materials from foreign firms in Indonesia has been deemed unethical and contrary to its promise to apply environmental, social and governance (ESG) principles in its investments.
According to the Mining Advocacy Network (Jatam), the Texas-based carmaker intends to seal a nickel deal with China’s Zhejiang Huayou Cobalt and CNGR Advanced Material, both of which operate in Morowali.
Huayou Cobalt, headquartered in the Tongxiang Economic Development Zone in Zhejiang, is a major producer of raw materials for lithium batteries and cobalt products.
CNGR Advanced Materials, based in the Dalong Economic Development Zone of Guizhou, Western China, is a holding subsidiary of the Hunan CNGR Holding Group that produces and supplies new materials for lithium batteries.
Read also: Indonesia has what it takes to compete for investment: IFC
