As Indonesia powers up EV battery dream with Australian lithium, China set to benefit

Lithium is a critical component in EV batteries, and importing more of the commodity will help Indonesia fulfil its goal of becoming an EV manufacturing hub

While the move reduces its reliance on China, the latter will still benefit as the lithium exports will still be processed by Chinese firms in Indonesia, analysts say

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File photo of a lithium mine in Chile. The material is a key component of batteries used in electric cars. Photo: AFP

Published: 5:30pm, 28 Feb 2023

Indonesia is inching closer to its dream of becoming a manufacturing hub for electric vehicle (EV) batteries after signing an agreement to import lithium from Australia, in a move that analysts said could help the Southeast Asian nation reduce its dependence on China.

Indonesia’s Chamber of Commerce on February 21 signed a pact with the government of Western Australia, where the bulk of lithium mines are concentrated.

Jakarta’s intentions were conveyed to Australian Prime Minister Anthony Albanese in Canberra recently by Indonesia’s coordinating minister for maritime and investment affairs Luhut Pandjaitan.

“To meet our target of becoming the world’s largest lithium battery producer, we hope to increase our imports of lithium from Australia,” Luhut said.

In Australia there is lithium, we have nickel, when combined it becomes an electric car battery

Joko Widodo, Indonesian President

Indonesian President Joko Widodo also made an offer to Albanese during the B20 Summit, the G20’s business-focused meetings in Bali in November. “In Australia there is lithium, we have nickel, when combined it becomes an electric car battery,” Widodo had said.

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