Australia will “advance mutually beneficial cooperation” with Indonesia on the electric vehicle supply chain, including in battery manufacturing and critical minerals processing to lessen the current reliance on China.
Through the agreement both countries “will work together on mapping EV supply chains, joint scientific and research studies, as well as fostering new business-to-business links”, the government said in a statement.
The memorandum of understanding was signed on Thursday between Industry and Science minister Ed Husic and Indonesia’s Acting Coordinating Minister for Maritime and Investment Affairs Erick Thohirm during Mr Husic’s two-day trip to the Southeast Asian nation.
Australia and Indonesia have similar reserves of nickel, used in some EV battery chemistries. But Indonesia is producing 40 per cent of world supplies while Australia produces just six per cent.
Under Australia’s updated critical minerals strategy, the federal government wants to increase collaboration with “like-minded partners” to reduce reliance on China-dominated supply chains. Nickel is not currently on the Australian critical minerals list, although the list is currently being updated.
Mr Husic told ABC News on Thursday afternoon that “we’ve got the lithium, they’ve got the nickel; together we can take a big leap forward towards net zero together, and this is finding a way of deepening the economic relationship by working on a shared priority”.
In a statement on Friday, Mr Husic said that both countries “recognise the incredible potential of electric vehicles and battery manufacturing – and that’s why today’s announcement is so exciting”.
“By collaborating on growing strong and diverse clean energy supply chains, both countries can further our shared economic interests as well as our trade and investment links,” Mr Husic said.
“This mechanism also paves the way for harnessing joint scientific and research studies, including around critical minerals processing and battery development, and facilitating partnerships between businesses in both our countries.”
The EV MoU builds on efforts undertaken between Prime Minister Anthony Albanese and Indonesian President Joko Widodo during their annual leaders’ meeting in July.
Going into that meeting Mr Widodo had been pushing for a deal on EVs but it wasn’t reached and the leaders instead “directed officials to advance cooperation and collaboration on this vital matter”, according to a communique.
The new agreement also builds on the $200 million Australia-Indonesia Climate and Infrastructure Partnership. This includes a $50 million fund, also launched in July, to support investment in clean energy-focused Indonesian small and medium-sized enterprises.
Mr Husic told ABC News the Albanese government is committed to deepening its relationship with Indonesia, to “not just talk the walk, but walk the walk”
“Since our election as a Government [there have been] over 30 visits by Ministers to Indonesia working with our counterparts on things of common interest.”
Last week, both Indonesia and Australia both signed a supply chain agreement and committed to a Clean Economy Agreement through the United States-led Indo-Pacific Economic Framework, which includes 10 other countries in the region.
The Australian EV strategy, published in April, did not include initiatives to support domestic manufacturing, although it highlighted that “Australia has a narrow window of opportunity to capitalise on global critical minerals demand and unlock our potential as a clean energy superpower”.
Consultation on a national battery strategy began in February but has yet to be released.
