Australia and Indonesia have signed a 'win-win' EV battery deal, analyst says

Mining giants Australia and Indonesia person signed a "win-win" EV artillery deal, said Sabrin Chowdhury, caput of commodities investigation astatine BMI, a probe portion of Fitch Solutions.

Indonesian President Joko Widodo met his Australian counterpart Anthony Albanese connected Tuesday during a three-day authorities sojourn to Australia.

In summation to their committedness to determination bid and security, the 2 countries discussed economical partnerships including practice connected electrical conveyance batteries, longer concern visas and concern successful the greenish economy.

The 2 countries welcomed "new commercialized deals betwixt Australian and Indonesian concern crossed the health, mining and integer system sectors," according to a authorities property release.

"[Indonesia] has a large purpose to make its EV manufacturing industry. And they truly request lithium for that," said Chowdhury.

"Lithium and nickel together, they're precise important parts of EV batteries. So definitely, it is simply a win-win," she told CNBC connected Wednesday.

Australia's exports to Indonesia, Southeast Asia's largest economy, deed $14.6 cardinal successful 2022. Two-way concern successful minerals and mineral processing betwixt the countries has besides grown.

During the trip, the Indonesian Chamber of Commerce and Industry and Western Australia besides signed an Action Plan successful a pledge to bring some parties person and much progressive successful each other's captious minerals sector.

"The concern betwixt Indonesia and Western Australia tin unfastened up large opportunities successful the captious minerals sector," said the Indonesian ambassador to Canberra, Siswo Pramono.

"Australia volition go a lithium supplier and Indonesia volition go a nickel supplier, some of which are the main components successful EV production," helium added.

Australia is the world's largest supplier of lithium. Indonesia, likewise, has the world's largest nickel reserves and is aiming to found itself arsenic a cardinal planetary EV artillery supplier. Both metals are cardinal components successful the making of EV batteries.

Demand for nickel is "very strong," arsenic it's utilized successful EV artillery manufacturing, said Chowdhury. "The terms outlook is precise beardown implicit the longer word truthful this volition decidedly payment Indonesia," she said.

Given however Australia is simply a besides a large shaper of some nickel and lithium, Chowdhury said determination is "no saying" determination volition not beryllium a script wherever the state could not commencement their ain manufacturing hub arsenic well.

However, she highlighted determination is an "accelerating demand" for EV vehicles implicit the coming decades, and hence determination is "a batch of space" for some countries to coexist and cater to this demand.

On apical of the enhanced practice connected nickel and lithium mining, some countries besides announced greater collaboration successful clime and infrastructure.

Albanese announced an investment worthy 50 cardinal Australian dollars ($33 million) to pull backstage clime concern into Southeast Asia's largest economy.