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Indonesia invites US to work on critical minerals agreement
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President Joko “Jokowi“ Widodo shook hands with US Vice President Kamala Harris during sideline of the 43rd ASEAN Summit held on Wednesday, Sept. 6, 2023, in Jakarta. (Coordinating Ministry for Economic Affairs of the Republic of Indonesia)
P
resident Joko “Jokowi” Widodo has requested the United States to kick start work on a critical minerals agreement (CMA), as Indonesia seeks to retain its electric vehicle (EV) manufacturing competitiveness against other producer countries.
Speaking with US Vice President Kamala Harris on the sidelines of the 43rd ASEAN Summit in Jakarta, Jokowi emphasized that Indonesia stands ready to become the supplier of EV batteries to the US.
“Indonesia is ready to become part of the US’s global supply chain, including partnering with the US in semiconductor products,” said Jokowi in a statement on Thursday.
The US has issued a guidance for EV tax credits under the Inflation Reduction Act (IRA) that requires a threshold percentage of the battery’s critical minerals to be extracted or processed in a country that has a free trade agreement (FTA) with the US.
Indonesia, however, does not have an FTA with the US despite it currently being the world’s largest nickel producer.
The government would propose a limited FTA for some minerals shipped to the US so that firms working in its EV battery supply chain can benefit from US tax credits, Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said in April.
However, no agreement has been forthcoming.
