​​​​​​​Indonesia has the world's largest critical mineral reserves in the world for raw materials of batteries and electric vehicles.
Jakarta (ANTARA) - Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin), Arsjad Rasjid, has welcomed an initiative to submit a limited Free Trade Agreement (FTA) proposal to the United States (US) on critical mineral trade.

The initiative is expected to support the electric vehicle (EV) manufacturing industry ecosystem as well as the development of new and renewable energy, he said, according to a statement issued on Tuesday.

"Indonesia's limited FTA proposal to the US is the right attempt to help Indonesia’s critical minerals and the electric vehicle manufacturing industries to compete in the global market, especially in the US,” he added.

The United States’ Energy Act of 2020 describes critical minerals as minerals, elements, substances, or materials designated as critical by the Department of the Interior and the US Geological Survey, according to information on the website of the Department of Energy.

The agencies’ final list of critical minerals, published on February 24, 2022, has 50 critical minerals, including aluminum, chromium, cobalt, lithium, magnesium, manganese, nickel, platinum, and tin.

Some of the critical minerals, such as nickel, aluminum, and cobalt, are important for the development of the domestic as well as global new and renewable energy ecosystems, the Kadin chairperson noted.

Hence, submitting a limited FTA proposal is important for maintaining investment sustainability and opening up supply chain market opportunities for Indonesia’s nickel ore products and their derivatives in the United States, he said.

"The government is negotiating the limited FTA with the US and we (Kadin), as business players, are ready to ensure the successful implementation of the agreement,” he added.

“We believe that with strong cooperation between the government and the business sector, Indonesia will benefit greatly from the limited FTA," Rasjid affirmed.

Indonesia has huge bargaining power in the negotiation effort, he noted.

"Indonesia has the world's largest critical mineral reserves in the world for raw materials of batteries and electric vehicles,” he highlighted.

For instance, Indonesia’s reserves of nickel and bauxite account for about 33 percent and 4 percent of global reserves, respectively, he informed.

He said he hopes that the limited FTA proposal will be agreed upon promptly to encourage mutually beneficial bilateral trade cooperation and strengthen Indonesia's position as a major player in the global critical mineral industry.

The United States’ Inflation Reduction Rate (IRA) Act seemed to push aside Indonesia’s critical mineral products solely because there was no FTA between the two countries, he added.

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Translator: Ade Junida, Uyu Liman
Editor: Sri Haryati
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