Some time ago, Indonesia and Australia signed the IA-CEPA bilateral cooperation, which was quoted on the official website of the Ministry of Foreign Affairs as a comprehensive economic partnership agreement between Indonesia and Australia, with the basic principle of a win-win partnership.
This partnership will strengthen economic relations between Indonesia and Australia in the long term. IA-CEPA is different from the FTA Free Trade Agreement.
Recently, specifically for the automotive sector, a Memorandum of Understanding (MoU) was signed between the two countries regarding electric vehicles (EV).
Quoted from the Antara news agency, the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Ad Interim of the Republic of Indonesia Erick Thohir explained that nickel and lithium are the two main minerals used in electric vehicle batteries.
Electric cars or Electric Vehicles were exhibited at GIIAS, as an illustration of Indonesia’s plans for NZE 2060 [/Alfian Winanto] “Indonesia has developed its nickel downstream industry towards the electric vehicle ecosystem in the last five years. There are three factories in Indonesia operating to produce mixed products. hydroxide precipitate, a basic precursor to batteries,” he explained.
Then, several battery manufacturing projects have also been planned to be built in Indonesia and will start in the next few years.
On the other hand, Australia has 24 percent of the world’s lithium reserves (second after Chile). Australia will account for 43 percent of global lithium extraction by 2022.
Australia can benefit from this abundant lithium resource by collaborating with Indonesia, which has developed its nickel industry, in building a new axis for the electric vehicle battery ecosystem, as well as establishing an alliance.
This common background as a metal mineral producing country is the basis for Indonesia and Australia to sign an MoU for cooperation in the EV sector, especially processing materials for making electric vehicle batteries.
So on Thursday (23/11/2023), the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Ad Interim of the Republic of Indonesia Erick Thohir and the Australian Minister of Industry and Science Ed Husic signed a Memorandum of Understanding on the Establishment of a Bilateral ‘Mechanism’ to Advance Collaboration on Electric Vehicles (EV) between Indonesia and Australia.
Lithium-ion battery illustration. [Kumpan Electric/Unsplash] “Indonesia and Australia not only have geopolitical proximity, they also have abundant mineral resources, as well as the opportunity to become key players in the global electric vehicle supply chain,” said the Indonesian Coordinating Minister for Marves Ad Interim at this signing event .
He emphasized that the birth of the MoU was to follow up on the commitment announced by the President of the Republic of Indonesia and the Prime Minister of the Commonwealth of Australia at the Annual Leaders’ Meeting to advance cooperation and collaboration in the electric vehicle industry.
This bilateral mechanism facilitates mutually beneficial cooperative relationships, as well as collaboration in mapping the electric vehicle supply chain and ecosystem, sharing best practices regarding social environmental standards and governance (environment, social and good governance or ESG).
Then support knowledge transfer, facilitate new business-to-business partnerships and establish joint steering committees to guide work flow and monitor collaboration results.
This collaboration in the EV sector certainly opens up opportunities for Indonesia as a mineral resource producing country to play an active role as a producer in the steps towards Net Zero Emission or NZE 2060.
Where our country not only plays a role as a user of electric vehicles but also distributes products . Both batteries for Battery Electric Vehicle (BEV) vehicles and swappable batteries that can be used in various vehicles, from two-wheelers to four-wheelers.
If this series of material procurement and production managed collaboratively can be realized, the Indonesian economy will also experience changes. The export market is expected to increase, and the IA-CEPA scheme can be utilized by both countries for mutual progress.
As explained by the Indonesian Coordinating Minister for Maritime Affairs and Fisheries, Indonesia and Australia not only have geopolitical similarities, but also mineral resources that are ready to be managed jointly by both parties. There will also be technology transfer and the opening of new business partnership models.
