Tomorrow Investor

Aussie, Indo Governments Sign Off on EV Battery Agreement


The recent state visit of Indonesian President Joko Widodo to Australia last week turned out to be a milestone in both nations’ journeys towards becoming carbon-neutral economies.

On top of their respective commitments to peace and security within the Asia-Pacific, the heads of government came to several agreements, including those for longer visas for those on business, green investments, as well as economic cooperation for the electric vehicle (EV) battery sector which stands to become one of the world’s biggest industries within the foreseeable future.

As a result of the talks between Albanese and Widodo, the state visit was also marked by the signing of a workable action plan between the state government of Western Australia and the Indonesian Chamber of Commerce and Industry. The agreement is meant to draw relevant parties in each country’s minerals sector together, enabling them to collaborate in a number of mutually beneficial initiatives.

According to Sabrin Chowdhury, head of commodities analysis for Fitch Solution’s research arm BMI, Indonesia is gunning to become a major player in the EV industry and is rapidly moving to develop local facilities for such production. However, they’re going to need a lot of lithium for that, and Australia has a great deal of it to trade. 

On the other hand, Indonesia is also one of the world’s biggest producers of nickel – another key component for EV battery production – and Australia stands to benefit from a trade agreement that gives their EV initiatives a leg up thanks to a bankable supply of the mineral.

Aside from the epochal minerals agreement, Australia and Indonesia also announced even more collaboration between the nations in terms of infrastructure development and mitigating the impact of climate change. In the case of the latter, Albanese stated that his government would invest around $33 million to draw private climate finance experts to Indonesia.

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