Nickel is a key mineral in batteries, a pivotal component in green energy technologies, and Indonesia has the world's largest nickel reserves, centered on the monkey-shaped island of Sulawesi. But Chinese investment in smelting and refining Indonesia's nickel is putting it at the center of a geopolitical tug of war.
"Mr. Luhut [an Indonesian cabinet minister] aspires to transform Indonesia into a hub for the production of electric vehicles. But as he pursues that paramount goal, he and his country are increasingly vulnerable to geopolitical forces beyond their control. Though this archipelago nation has long sidestepped entanglements in ideological rivalries, it is increasingly caught in the conflict between the United States and China. At stake is control over nickel, a mineral used to make batteries for electric cars and motorcycles — a central component of the mission to limit the ravages of climate change. Indonesia boasts the earth’s largest reserves, making it something like the Saudi Arabia of nickel. But harvesting and refining those stocks is largely dependent on investment and technology from Chinese companies. And that has limited Indonesia’s access to the United States. ... In recent months, Mr. Luhut — formally Indonesia’s coordinating minister for maritime affairs and investment — has implored the Biden administration for a trade deal covering minerals in an effort to secure his country status as a friendly country. That would generate greater demand for its nickel by making it eligible for the American tax credits under the Inflation Reduction Act. Companies around the globe would presumably gain incentive to erect smelters and electric vehicle factories in Indonesia, enhancing the nation’s technological prowess, and creating jobs. But Mr. Luhut, the government’s de facto lead official on trade matters, has been repeatedly rebuffed because of American concerns about Chinese investment in Indonesia’s nickel industry, as well as unease over working conditions and environmental standards. ... “We are aiming basically to the United States,” he said. “But if the Americans finally say, ‘We don’t want to take it,’ fine, we’ll look for some other places to go.”"www.nytimes.com/2023/08/18/business/indonesia-nickel-china-us.html
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