Bandung, CNBC Indonesia – West Java (West Java) Governor and President of the Association of Oil and Gas Producing Regions and Renewable Energy (ADPMET) Ridwan Kamil warned of caution about China’s attitude towards Indonesia’s nickel supply.
Because, from the news it has heard, world-renowned electric car maker Tesla Inc. often buys nickel raw materials from China for the battery needs of its electric vehicles. Meanwhile, China buys nickel supplies from Indonesia.
“We have to be careful with China, he gets nickel from Sulawesi, part from us, a little from China. I heard Tesla bought it from China, nickel from us. So, I think it’s a bit immoral”, said Ridwan, in Bandung, quoted by Antara, Tuesday (4/10/2022).
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As is well known, the government continues to push the ecosystem of Indonesia’s electric vehicle battery industry. This can be seen from the number of nickel smelting projects by Chinese investors in Sulawesi to produce battery raw materials.
The Coordinating Minister for Maritime Affairs and Investment of the Republic of Indonesia, Luhut Binsar Panjaitan, in an interview with CNBC Indonesia previously pointed out that Indonesia has secured and positioned itself as a major global player for the nickel. However, the Tesla nickel purchase deal was finalized by Elon Musk’s company via a Chinese battery manufacturer operating in Indonesia.
After a visit to Indonesia on May 22, Tesla finally gave the green light to secure Indonesia’s nickel supply and signed contracts with Zhejiang Huayou Cobalt Co and CNGR Advanced Materials Co for the direct supply of lithium-ion batteries from Morowali Industrial Park.
Zhejiang Huayou Cobalt itself is one of the world’s leading cobalt producers and in Indonesia it is known for having an HPAL Huayue Nickel Cobalt (HNC) factory supplied by PT Sulawesi Cahaya Mineral (SCM). Meanwhile, SCM itself is indirectly owned by PT Hamparan Logistik Nusantara, a company that was recently acquired by Merdeka Copper Gold (MDKA) with a total value of Rp 5.4 trillion.
Although you don’t buy directly from an Indonesian company, the Zhejiang contract is quite large or worth $ 5 billion, equivalent to Rs 75 trillion (assuming an exchange rate of Rs 15,000 / USD). Luhut said the nickel smelter operates in Morowali and cooperates with dozens of industries there.
Meanwhile, Chinese ternary precursor manufacturer CNGR is known to be partnering with Aneka Tambang (ANTAM) for the construction and development of a joint Industrial Estate project.
This collaboration will adopt the latest technology for building nickel production lines, committed to carbon reduction and green development. The mining and smelting production line is expected to reach a total annual capacity of 80,000 tons of dull nickel, which will produce battery charge for new energy or electric vehicles.
Zhejiang Huayou Cobalt and CNGR Advanced Materials earlier this month signed a pricing agreement with Tesla to ensure supply through 2025, according to a separate release from the company’s stock exchange.
The deal is for a ternary precursor: a chemical key to storing energy in lithium-ion batteries.
Tesla’s contract with Zhejiang Huayou runs from July 2022 to December 2025, during which the cobalt miner said product prices would be subject to market prices for nickel, cobalt and manganese, as well as refining fees. Meanwhile, CNGR Advanced Materials will run from 2023 to 2025.
Both Huayou and CNGR are on the list of direct suppliers cited by Tesla in its 2021 annual impact report.
Tesla’s contract announcement comes as a number of major automakers seek to secure nickel supplies for batteries in the face of a looming potential supply restriction.
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New leaks about Tesla investments in Indonesia, Luhut, we must be patient!
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