ASIATODAY.ID, JAKARTA – Southeast Asian nickel commodities, which are the main raw material for global electric vehicles, are now the epicenter of rivalry between the United States (US) and China.
To prevent China from dominating the nickel processing industry in the Southeast Asia region, including Indonesia, the US has pioneered trilateral cooperation with the Philippines and third countries such as Japan, South Korea or Australia in the nickel processing industry.
One step being considered is a trilateral arrangement in which the Philippines would supply nickel raw materials, the US would provide financing, and a third country such as Japan, South Korea or Australia would offer the technology needed for smelting and refining, according to sources familiar with the plans.
US talks with the Philippines — the world’s second-largest mined nickel producer after Indonesia — are still in the early stages, and key elements of any potential deal remain to be finalized, including whether the US can meet the financing, said the source, who asked not to be identified.
In this context, the position of Indonesia and the Philippines is very decisive. For Indonesia, this US step is a special note.
Indonesia’s Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, underlined that Indonesia is a big country, where no country can dictate.
“Why are we afraid? We are a big country, remember, Indonesia is a big country. No one can dictate to us,” said Luhut in Jakarta, Friday, May 3 2024.
Luhut said that the government would fight against countries that hinder Indonesia. Moreover, Indonesia also has rights as a developed country.
“Nobody can dictate Indonesia. Indonesia is a big country,” said Luhut.
Luhut also emphasized that Indonesia no longer exports raw materials, such as nickel ore. This is done so that Indonesia can experience the added value of downstream nickel.
Without Indonesian Nickel, the US EV Market Falls
Previously, Luhut said that without Indonesian nickel, the US electric vehicle market would decline. Because Indonesia has the largest metal reserves in the world. This was written by Luhut in a column article published by the Foreign Policy magazine website from the United States entitled “Without Indonesia’s Nickel, EVs Have No Future in America” on May 1 2024.
“Several members of the US Congress, in collaboration with foreign competitors from Indonesia, have decided to block the import of processed nickel from Indonesia. As for now forcing companies there to switch from selling gas-powered vehicles, in the end it will be US auto workers who will suffer ,” wrote Luhut.
Luhut continued that the senators’ objections tended to focus on environmental issues because many smelters in Indonesia use coal as fuel.
For some members of Congress, that’s less than acceptable despite the net carbon benefits of taking combustion engines off the road. According to Luhut, this kind of perspective is ultimately detrimental to themselves.
“For emissions reductions in the US to be significant, Americans must use more electric vehicles. The transportation sector is the nation’s largest emitter, while currently less than one percent of vehicles in the US are electric. Widespread adoption will depend on affordability, said Luhut.
Luhut also said that Indonesian nickel could become more environmentally friendly. However, for this to happen, economic development is very important through export receipts or foreign direct investment.
“There are also government initiatives with limits and taxes on carbon emissions which will be implemented this year, and at the same time new coal-fired power plants have been banned. However, the green transition in Indonesia ultimately depends on capital,” said Luhut.
Luhut said US lawmakers’ concerns about the environment over the proposed free trade agreement were also supported by tensions between Beijing and Washington. Chinese companies are present in nickel refining in Indonesia. However, so do South Korean and even US companies.
“If the US decides to implement a blanket ban on Indonesian nickel simply because of the presence of other countries in the industry , such a move would run counter to US Treasury Secretary Janet Yellen’s assurances that US allies in the Indo Pacific should not be forced to choose between China and the US. Ultimately Indonesia’s nickel will be exported somewhere,” said Luhut.
Luhut emphasized that Indonesia wants to partner with all parties.
“It’s up to Washington whether it wants to shake hands to create a greener future. However, my country will not wait indefinitely,” said Luhut. (AT Network)
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