President Joko Widodo of Indonesia met with US President Joe Biden in Washington for talks on Monday on a comprehensive strategic partnership. This includes critical minerals like nickel. White House sources said the intended collaboration will boost bilateral trade and deepen economic policy co-operation.
Indonesia is the largest global producer of nickel and has about 21 million tonnes of reserves. Cobalt is another rich resource which has seen recent investment in mining and processing facilities. Indonesia is also one of the largest producers of tin.
Nickel was the current focus with the Biden administration’s aim of developing a full US critical mineral supply chain, particularly regarding minerals for electric vehicle (EV) batteries.
The US has very little in the way of nickel reserves, with the Eagle mine in Michigan now being the only one. It is expected to close within the next few years. The US also has no nickel smelter.
Last year the US government gave nearly a $115 million to Talon metals to partially fund a nickel processing plant in North Dakota. It faced very strong opposition from local and indigenous communities.
Indonesia does not currently have particularly strong regulations for companies regarding environmental, social and governance concerns. The environmental cost of mining nickel is high as it can cause substantial air and water pollution, plus deforestation.
The slag also has to be processed very carefully to avoid environmental problems. Countries such as Australia and the Philippines have been phasing out their nickel mines for this reason. Yet nickel demand for EV batteries remains high.
The two presidents issued a joint statement announcing a Memorandum of Understanding on sustainable energy and mineral development. It is designed to advance technical cooperation on enabling environments and regulatory frameworks to help increase the uptake of renewable energy resources, enhance grid resiliency and security.
The agreement also seeks to improve technologies for responsible mining and minerals processing practices and support Indonesia’s development of a lower-emissions critical mineral sector.
The US Department of the Environment and Indonesia’s Ministry of Energy and Mineral Resources intend to partner through the Net Zero World Initiative and identify clean energy alternatives to captive coal-powered growth.
They said their road map encourages the creation of “clean, high value battery, semi-conductor and nickel supply chains that meet world-class environmental and labour standards.” The White House is reportedly consulting with labour organisations on Indonesia’s labour standards.
Photo: Opening and land clearing of a nickel mining area. Shutterstock