JAKARTA, Feb 6 (Reuters) - Armed with the world's largest reserves of nickel and a ban on the export of nickel ore, Indonesia is making itself indispensable for the electric vehicle industry, which uses the metal extensively.
In just three years, Indonesia has signed more than a dozen deals worth more than $15 billion for battery and electric vehicle production in the country with manufacturers including Hyundai Motor (005380.KS), LG Group (003550.KS) and Foxconn (2317.T).
Next up is the mammoth Tesla Inc (TSLA.O), the world's most valuable automaker. President Joko Widodo has pulled out all the stops to convince CEO Elon Musk to manufacture electric vehicles or batteries in the sprawling Southeast Asian archipelago.
"I'm very confident this industry will grow quickly, will grow very fast," the president, popularly known as Jokowi, said in an interview last week.
Indonesia has a total of 21 million tonnes in proven reserves with nickel content, according to the U.S. Geological Survey. That is nearly a quarter of the world's reserves.
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The country mined 1.4 million tonnes of nickel in January-November last year, according to the International Nickel Study Group. That's far ahead of the second-biggest producer, the Philippines, which mined 290,000 tonnes in the same period, and more than double Indonesia's output of 606,000 tonnes in 2018.
Jokowi banned exports of nickel ore in 2020, but allowed export of higher value nickel products - forcing companies to process and manufacture onshore.
The country mined 1.4 million tonnes of nickel in January-November last year, according to the International Nickel Study Group. That's far ahead of the second-biggest producer, the Philippines, which mined 290,000 tonnes in the same period, and more than double Indonesia's output of 606,000 tonnes in 2018.
Jokowi banned exports of nickel ore in 2020, but allowed export of higher value nickel products - forcing companies to process and manufacture onshore.
Musk's goal is to sell 20 million electric vehicles in 2030, more than a 15-fold increase over the 1.3 million vehicles Tesla sold in 2022. For that, it would need to build seven or eight more "gigafactories" - facilities that produce electric car batteries on a large scale - at an average of one every 12 months or so. read more
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The nickel export ban has been challenged at the World Trade Organisation by the European Union. The WTO ruled in the EU's favour, but Indonesia has filed an appeal.
But Indonesia's success has already prompted other countries to emulate its steps, with the Philippines planning to tax exports of nickel ore to encourage miners to invest in processing.