Indonesia trying to cut China stakes in new nickel projects
Indonesia’s government is seeking to reduce Chinese participation in new nickel projects to help the industry qualify for US government subsidies, the Financial Times reported, citing a person familiar with the matter.
Government officials have been in discussions with investors to build new smelters in which Chinese companies have less than a 25% stake, the newspaper reported. Septian Hario Seto, deputy co-ordinating minister for investment and mining, confirmed the country’s efforts, according to the FT.
In response to written questions on Friday, Seto said the government would not intervene with a policy on Chinese shareholdings.
Indonesia is the world’s largest nickel producer, accounting for more than half of global supply. Currently Chinese companies dominate local processing of the metal that’s used in stainless steel and electric vehicle batteries.
That could see much of Indonesia’s production excluded from the US’s Inflation Reduction Act, which gives generous subsidies to EVs provided their components aren’t sourced from “foreign entities of concern”. That includes companies more than 25% owned by Chinese investors.
To qualify for the subsidies Indonesia would also need to sign a free trade agreement with the US. Talks between the two countries for a deal covering critical minerals have been ongoing for months but have yet to produce an accord.