US-Indonesia Nov. 13 bilateral meeting could include talks on nickel agreement

The US will host Indonesian President Joko Widodo for a Nov. 13 bilateral meeting that could see movement on a possible US-Indonesian nickel trade deal.

Indonesian officials outlined plans in April to create a limited free trade agreement with the US that would allow electric vehicles produced with Indonesian nickel to meet eligibility requirements for US clean vehicle credits under the Inflation Reduction Act. US officials have not yet offered a commitment to form a trade agreement with Indonesia.

The US signed a similar battery metals trade agreement with Japan in late March, and the country is in talks with the EU and Australia about various critical minerals supply chain measures.

An agreement with Indonesia could be a boost to EV-makers, including Ford Motor Co., which entered into a joint venture with PT Vale Indonesia Tbk and China's Zhejiang Huayou Cobalt Co. Ltd. in March to secure nickel for EV batteries. Indonesia is the world's largest primary nickel producer and is forecast to increase its nickel production, keeping the global primary nickel market in a surplus in 2024.

A possible US-Indonesia nickel agreement would likely face political opposition in the US, where a bipartisan group of nine senators sent a letter on Oct. 24 to the US trade representative and the secretaries of the Energy, Treasury and Commerce Departments expressing concerns about a potential nickel agreement. The concerns included Indonesia's "standards for labor rights, environmental protection, safety, and human rights" and the country's trade restrictions on critical minerals.

A deal with Indonesia would also alarm Australian mining companies that want to keep the inside track of supplying US automakers in an increasingly competitive battery metals market.

The White House did not immediately respond to a request for comment on the agenda of the Nov. 13 discussions.

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