Mining giants Australia and Indonesia have signed a “win-win” deal for electric vehicle batteries, said Sabrin Chowdhury, head of BMI commodities analysis at Fitch Solutions Research.
Indonesian President Joko Widodo met with Australian President Anthony Albanese on Tuesday during his three-day state visit to Australia.
In addition to their commitment to regional peace and security, the two countries also discussed economic partnerships, including electric vehicle battery cooperation, extended business visas and green economy investments.
The two countries welcomed “new commercial agreements between Australian and Indonesian companies in the fields of health, mining and the digital economy”. According to a government press release.
“(Indonesia’s) main goal is to develop electric vehicle manufacturing. For that they really need lithium,” Chowdhury said.
“Lithium and nickel together, they’re a very important component of electric vehicle batteries. So there’s no question it’s a win-win,” she told CNBC on Wednesday.
Australian Prime Minister Anthony Albanese, left, and Indonesian President Joko Widodo travel by boat to Sydney’s Taronga Zoo for their annual leaders’ meeting on July 4, 2023.
David Swift | AFP | Getty Images
Australian exports Indonesia, Southeast Asia’s largest economy, will see trade worth $14.6 billion by 2022. Mining two-way investment Mineral processing between the two countries has also grown.
During the visit, the Indonesian Chamber of Commerce and Industry and Western Australia also sign action plan A commitment to bring both sides closer and more involved in each other’s key minerals sectors.
“A partnership between Indonesia and Western Australia could open up enormous opportunities in the critical minerals sector,” Siswo Pramono, Indonesian Ambassador to Canberra, said:.
“Australia will be a supplier of lithium and Indonesia will be a supplier of nickel, both of which are major components of electric vehicle production,” he added.
australia is The world’s largest lithium supplier.Likewise, Indonesia has the largest nickel reserves in the world aims to build itself As the world’s major electric vehicle battery supplier. Both metals are key ingredients in making electric vehicle batteries.
Demand for nickel is “very strong” because it is used in electric vehicle battery manufacturing, Chowdhury said. “In the long run, the price outlook is very strong, so this will definitely benefit Indonesia,” she said.
Given Australia is also a major producer of nickel and lithium, “it cannot be said” that the country would not be unable to establish its own manufacturing hub, Chowdhury said.
She stressed, however, that there is “a growing demand” for electric vehicles in the coming decades, so there is “a lot of room” for the two countries to co-exist and meet that demand.
In addition to strengthening cooperation in nickel and lithium mining, the two countries have also announced increased cooperation in the fields of climate and infrastructure.
Albanese announced investment worth A$50 million (US$33 million) Attracting private climate finance into Southeast Asia’s largest economy.