Indonesia and China have signed strategic cooperation agreements in critical minerals in total bilateral deals worth $10 billion encompassing green technology, food security, and mineral resources.
The agreements were signed this weekend at the Indonesia-China Business Forum in Beijing, which was the first overseas visit of newly inaugurated Indonesian President Prabowo Subianto.
“We aspire to strengthen our cooperation with China, which has solidified its unparallel global position,” Subianto said at the forum.
“We welcome more investment and are committed to creating a favorable investment climate, offering the best facilities and comprehensive support to our brothers and sisters from China,” the president added.
As part of the strategic corporate deals, Chinese battery materials producer GEM reached an agreement with nickel producer PT Vale Indonesia to build a high-pressure acid leaching plant in Central Sulawesi in Indonesia.
The project is expected to process lateritic nickel ore from a mining area of PT Vale Indonesia and convert it into mixed hydroxide precipitate (MHP) products containing nickel and cobalt that meet market standard specifications.
As China aims to further develop its electric vehicle and battery industry, Indonesia, the world’s biggest nickel producer, can help with the supply of the critical mineral.
For its part, Indonesia, the largest economy in the Southeast Asian bloc, looks to develop its EV production capabilities as demand grows. The government hopes to be producing 13 million electric motorcycles and 2.2 million electric cars by the end of the decade.
Indonesia has a well-established metals and minerals industry, with huge nickel reserves. Nickel is a vital component of EV battery production and sourcing it locally can help cut manufacturing costs.
Indonesia, the world’s biggest nickel miner, has been looking to develop nickel processing industries and ultimately produce batteries for EV manufacturers and is eager to attract foreign companies for those ventures.
By Tsvetana Paraskova for Oilprice.com
