By concentrating on the production of vital minerals like lithium and nickel, Australia and Indonesia have strengthened their cooperation in the field of electric vehicle (EV) batteries. Sabrin Chowdhury, the head of commodities analysis at BMI, a research division of Fitch Solutions, praised the agreement as a “win-win” situation.

Indonesian President Joko Widodo and his Australian counterpart Anthony Albanese addressed a number of economic alliances during a state visit to Australia, including collaboration in the manufacture of EV batteries, extended business visas, and investments in the green economy. The new business agreements covering industries including health, mining, and the digital economy were well received by the two countries.

Australia and Indonesia should forge business ties in lithium - Nikkei Asia
With its ambitious aspirations to grow its electric vehicle manufacturing sector, Indonesia has a high demand for lithium, a necessary component of EV batteries. Chowdhury asserts that the collaboration between the two nations is beneficial since lithium and nickel are essential components in the creation of EV batteries.

Australia exported $14.6 billion worth of goods to Indonesia, the biggest economy in Southeast Asia, in 2022. Additionally, there has been a noticeable increase in bilateral investments in the mining and processing of minerals.

The Indonesian Chamber of Commerce and Industry and Western Australia inked an Action Plan to promote cooperation in the crucial mining industry as a sign of deeper partnership. The strategy is anticipated to deepen relations and boost participation in each other’s mining sectors.

Australia and Indonesia should forge business ties in lithium - Nikkei AsiaThe Indonesian ambassador to Canberra, Siswo Pramono, stressed the importance of this relationship in establishing Australia as a lithium supplier and Indonesia as a nickel supplier, strengthening their respective positions as major players in the global EV battery industry.

Currently, Australia is the world’s top producer of lithium, while Indonesia has the greatest nickel deposits and ambitions to become a significant worldwide supplier of EV batteries. Given the growing demand for electric vehicles (EVs), notably for nickel used in battery production, Indonesia is well-positioned to profit from the metal’s favorable long-term pricing prognosis.

Due to its substantial supply of nickel and lithium, Australia may consider setting up its own EV battery manufacturing center, but both nations have plenty of space to cohabit and meet the growing demand for EVs in the next decades, according to Chowdhury.

Australia and Indonesia have pledged further cooperation on climate change and infrastructure, in addition to their partnership in the crucial minerals industry. Albanese promised to spend $33 million in Indonesia to draw private climate funding, thus enhancing their collaboration on tackling climate change issues.

The deal between Australia and Indonesia represents a major advancement in their collaboration on the manufacturing of EV batteries and the trading of essential minerals. The alliance has effects on the economy as well as the worldwide transition to green energy and sustainable transportation.


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