EV makers look to strengthen nickel supply chain in Indonesia

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Indonesia on a globe

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Electric vehicle manufacturers are wooing Indonesia to create a nickel-based battery supply chain in that country.

Elon Musk’s Tesla and China’s Contemporary Amperex Technology, otherwise known as CATL, and South Korea’s LG Chem are in the fray. 

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Firms look to secure Indonesian nickel supply

A senior Indonesian government official told news agency Reuters the government had recently received Tesla’s investment proposal. 

Since early last year, Tesla has been courting Indonesia because for the value of its strategic commodities, including nickel. Nickel is a critical metal used in batteries for EVs due to its properties enabling mass energy storage capabilities. Furthermore, nickel reduces the overall cost of batteries by limiting the amount of cobalt required. 

Tesla seems to have come back to the Indonesian government with a reworked proposal to the one it had submitted in May 2020. The latter had shown reluctance in just signing a raw material supply agreement. 

The minister told reporters, while acknowledging Tesla had sent its proposal, that Tesla’s engagement in Indonesia would extend past raw materials. If Tesla only wants to take raw materials, then the government was not too keen in pursuing a partnership.

Indonesia is also talking to CATL and LG Chem regarding their plans to create an EV battery supply chain, the Nikkei Asia reported. 

Potential energy storage system, lithium battery plant

According to some reports in the Indonesian media, the state-owned gold and nickel miner Aneka Tambang (Antam), along with holding company Mind ID, or Inalum, would soon be meeting Tesla officials to discuss the construction of an energy storage system (ESS) and lithium battery plant in Indonesia.

An official of Antam was quoted as saying the partnership aimed to develop “profitable” national and international projects by reaching out to potential partners with access to technology and markets. With sufficient funding, it could lead to an increase in production of processed mineral products from reserves owned by Antam and Mind ID.

Last year, Tesla filed a patent application for a “one million mile” lithium-ion battery. The battery uses nickel-cobalt-aluminium electrodes. 

Indonesia is fast emerging as a strong player in the supply of EV components for an EV. If the Tesla deal comes through, it would cement the country’s status as a strong player in this field. 

China has also been eyeing Indonesia for long. Chinese investors are leading the construction of at least four high-pressure acid leach plants, which process nickel laterite into chemicals used in batteries, in Indonesia.

Find more insight on MetalMiner’s LinkedIn. 

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