An official from the Indonesian government has confirmed recent reports that the country’s government will start early talks with electric vehicle manufacturer Tesla Inc. (NASDAQ: TSLA) over a possible investment in Li-ion battery development in the country.
Indonesia’s deputy head for mining and investment coordination, Septian Hario Seto, was the first to reveal news of the investment proposal. This development would boost Indonesia, which is already the largest producer of nickel globally. Nickel is an essential ingredient in Li-ion battery production, with the batteries being used in electric vehicles.
The price of nickel has recently surged to a six-year high as the demand expectations for the electric vehicle sector continue to rise. On behalf of the European Commission, Roskill prepared a report, which forecasts that the global demand for nickel will reach 2.6 million tons in two decades — considerably higher than the 92,000 tons recorded in 2020.
Indonesia has been involved in various international investments, which have helped strengthen the country’s position in the Li-ion battery supply chain. As 2020 came to an end, the country’s government entered into an electric vehicle battery manufacturing agreement with LG Chem valued at $9.8 billion, by signing a memorandum of understanding.
News of the government’s potential deal with Tesla comes after an announcement made last week by the Indonesian government, which revealed that the country would not allow the disposal of tailings in the sea by any battery-grade projects currently in operation or under construction. The announcement added that these projects would have to find other ways to safely store their tailings.
Roskill believes that this announcement was made in response to mounting pressure from Western original equipment manufacturers, such as Tesla, which place Environmental, Social and Governance standards at the top of their list of raw material procurement criteria. Last July, Tesla CEO Elon Musk asked for nickel that had been sourced in an environmentally sensitive and efficient way.
Apart from its success in the nickel market, Indonesia is also the leading nickel pig iron producer globally, with a fully integrated stainless steel chain of supply. This metal is used to make stainless steel, and while the metal itself isn’t being consumed in the country, it is exported to China, which is its biggest consumer in the world.
Roskill found that Chinese imports of the nickel pig iron metal from Indonesia doubled last year, as expansions from brownfield and greenfield capacity in Indonesia went online.
Outside of Indonesia, Excellon Resources Inc. (TSX: EXN) (NYSE: American: EXN) (FSE: E4X2) has registered significant increases in its production of silver, zinc and lead as of the end of 2020. This puts the company in a strong operational position this year and beyond.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
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