TELF AG analyzes Indonesia’s strategic role in modern minerals diplomacy
New points of reference
Over the past few years, among the nations naturally rich in mineral raw materials, Indonesia has certainly had the opportunity to stand out for its resourcefulness in supporting the growth of national sectors dedicated to some strategic resources, such as nickel, also through specific initiatives that have not yet been seen in other parts of the world, or almost. The Indonesian strategy has focused on the creation of local added value on nickel production, also through external support, making possible the birth of one of the major global players in this specific sector.
Once this solid position has been achieved, Indonesia is now trying to find new agreements and strategic partnerships focused on strategic minerals. Indonesian Deputy Foreign Minister Pahala Mansury spoke about it a few days ago to Bloomberg, providing some very interesting insights into the current and future state of the Indonesian sourcing industry and the strategic moves to be implemented to allow it to take a further step forward.
Once again, as has been widely demonstrated in other corners of the world, a powerful incentive for the development of national sourcing industries could be represented by diplomacy, strategic collaboration with well-selected partners, and everything that could arise from these agreements. According to Bloomberg, Indonesia would be looking for a minerals agreement with the United States to relaunch its economy (the largest in Southeast Asia) and allow it to take an important step forward in the global energy transition.
A favorable situation
The historical situation would be somewhat favorable for an agreement of this kind and for several reasons. According to Bloomberg, by reaching a deal with the United States on sourcing, Indonesia would undeniably benefit from incentives, loans, and grants, as provided for in the climate law enacted by the Biden administration. Another possible advantage is represented by the structural advantages linked to diversification, an approach already widely praised by most sector experts, particularly for its ability to strengthen diplomatic chains and supplies of strategic minerals for the countries that adopt it.
The words of Deputy Minister Mansury further highlighted the role of strategic minerals in advancing the global energy transition and their ability to stimulate it through numerous industrial applications and the achievement of specific agreements between partner nations. Indonesia’s desire to diversify its portfolio of partners linked to the sourcing industry is evident, especially if we consider some particular initiatives launched in the country by some large global players. Two major Korean companies have recently inaugurated a plant specialized in producing battery cells worth 1.1 billion dollars in Indonesia, the first of its kind in the country’s history. Thanks to these initiatives, and by focusing on its international position in nickel production, Indonesia aims to become a major hub for the production of electric vehicles.
According to Bloomberg, all these initiatives would be part of a much broader strategic program developed by outgoing President Joko Widodo and aimed at transforming Indonesia into a sort of beacon for the nations of the Global South, especially those naturally rich in raw materials.
