An indigenous battery industry would capture some of the value-added from the country's world-class nickel resource. Elon Musk went to New Caledonia to secure a supply. He should have gone to Indonesia. And maybe built a gigafactory.
As we saw back in April regarding Sulawesi:
Tesla Inc.’s Elon Musk has said nickel is the metal that concerns him most as he looks to scale up battery-cell production, and last year he promised a “giant contract” for miners to encourage production. Without new sources of supply, the robust EV industry could face a critical shortage within a few years.....
Capture some of the downstream profits and you have a bit more wiggle room to deal with the coal.
Related: "As Supply Chains Shift, Indonesia Should Get a Serious Look"
And the headline story from MENAFN, June 24:
Indonesia''s dirty coal habit is proving hard to break
In setting an original target of 2070 for net-zero carbon emissions, President Joko Widodo's government has made it clear to the angst of environmentalists that at least for now coal remains the necessary way of the future in powering Indonesia towards a place in the global industrial supply chain.
Despite a renewed campaign by the Joe Biden administration and the European Union to tackle climate change, there is still 6,000-8,000-megawatts of coal-fired power generation either under construction or in the final planning stages across the archipelago.
Analysts estimate that coal won''t reach peak usage until 2035, a period during which Indonesia hopes to become the world's fourth-biggest economy despite the setback caused by the Covid-19 pandemic that saw growth slide by minus-1.2% last year.
Domestic consumption still dominates the economy. But what is expected to drive further post-pandemic growth is Widodo's single-minded effort to become a major cog in the global lithium battery-electric car industry and other economic benefits those industries are expected to bring.
Former Indonesia ambassador to Washington Dino Djalal says Widodo was made to feel uncomfortable at last April's virtual global climate change conference when his 2070 zero-emissions target turned out to be 20 years behind most other countries.
Under the Paris Climate Change Agreement's five-yearly cycle, each of the 196 signatory countries are committed to mandatory nationally determined contributions (NDCs) to an increasingly ambitious program to slash greenhouse gas emissions.
While the president doesn''t usually show much interest in international affairs, he is now confronted with the realization that if he wants Indonesia to be a destination for major foreign investments, he can''t afford to ignore the growing demand for climate change action.
But only up to a point. Western pressure to phase out coal at this critical stage in Indonesia's development is often met with resentment, with officials noting that developed countries had no such environmental obstacles in growing their economies.
Widodo doesn''t react well to pressure and with powerful Chief Maritime Minister Luhut Panjaitan as his point man, some analysts believe Jakarta is falling ever-deeper under Beijing's influence with Chinese firms showing no signs of losing their position as the country's biggest investors.
Former trade minister Tom Lembong warned recently that Australia, the US and like-minded countries will have to mount a coordinated effort if they want to stop Jakarta ''going all in'' with the superpower. ''Indonesia will continue to gravitate towards China under the Jokowi administration and possibly beyond,'' he told the Sydney Morning Herald.
Djalal says climate change has been an Indonesian ''blind spot'' and that despite setting emission targets Widodo has remained fixated on infrastructure and economic development, with coal making up 22,000MW of the 35,000MW electricity program he launched in 2014.
Leaders at the recent G7 Summit in the UK agreed to end the funding of new coal generation in developing countries and to offer up to $2 billion to support the transition away from unabated coal capacity.
There are also signs that the EU may be prepared to add coal to a list of commodities that could be denied access to the European market unless Indonesia complies with international sustainability and environmental standards.
Although the government is committed to reducing emissions by 29% over the next eight years, or 41% with international assistance, it will only phase out new coal projects after 2025 when the last of the thermal plants under the 35,000MW program is commissioned.
''We think the strategy will shift to new and renewable sources (but) how Indonesia actually gets there is a question still up in the air,'' S & P Global Ratings analyst Minh Hoang told a webinar this week. ''Coal will still feature heavily in Indonesia's energy mix for years to come.''
While state-owned power utility Perusahaan Listrik Negara (PLN) is prohibited from building new coal-fired plants after 2025, the policy on private projects is unclear, particularly on the main islands off Java where power shortages have always been an issue.
The coal-fied Celukan Bawang 2 power plant in Singaraja on Indonesia's resort island of Bali. Chinaís plan to fund dozens of foreign coal plants from Zimbabwe to Indonesia is set to produce more emissions than those of major developed nations, threatening global efforts to fight climate change, environmentalists have warned. Photo: AFP / Sonny Tumbelaka
The biggest of those stations are in nickel-rich Central Sulawesi and North Maluku where Chinese industrial giant Tsingshan Steel and its partners are drawing on the world's biggest reserves of nickel to put Indonesia on the global industrial map.
Tsingshan's refining complex in Morawali, Central Sulawesi, is already powered by a 2,000MW coal-fired station, but the Mines and Energy Ministry (ESDM) has reportedly banned the firm from adding a further 250MW unit to its 750MW coal plant at Weda Bay in Halmahera.
After months of indecision and fruitless negotiation, that may explain why the government has now apparentlydecided that Freeport Indonesia's (PTFI) new copper smelter will be built at its original site at East Java's Gresik Industrial Park (JIIPE) instead of Weda Bay.
ESDM's director-general for minerals and coal, Ridwan Djamaluddin, told Petromindo.com earlier this month that PTFI and state-owned holding company MIND ID had made the final decision to stay with Gresik, which has already undergone some site preparation.
Joint venture talks ran into an obstacle over Tsingshan's demands for a 5% discount on the price of PTFI's concentrate and also parent Freeport McMoRan Copper & Gold's concerns over adhering to Securities and Exchange Commission (SEC) rules that Chinese firms are not compelled to follow.....
....MUCH MORE
Recently:
"Why Indonesia struggles to tap its solar energy potential"UAE Makes A Big Bet On Indonesia
Thorium: "Indonesia’s Nuclear Dream, Revived?"And many more, though be forewarned a lot of our Indonesia posts are on volcanoes or China encroaching on Indonesia's fishing grounds.