Indonesia Wants an “OPEC-like” Organization for Nickel

(Bloomberg) -- Indonesia, home to a quarter of the world’s nickel reserves, is proposing the creation of an organization similar to OPEC for the metal used in battery-making to coordinate supply. 

Investment Minister Bahlil Lahadalia expressed the idea of creating an “OPEC-like” cartel in a meeting with Canada’s International Trade Minister Mary Ng on the sidelines of the Group of 20 Summit in Bali on Tuesday, according to a ministry statement. The government also held talks with Australia. 

An alliance of mineral-rich countries will help to unite government policies and push the development of the downstream industry, Lahadalia said. Indonesia produced one million tons of nickel last year, while Australia and Canada had combined production of 290,000 tons, according to US Geological Survey.

The idea is the latest by Indonesia after a series of initiatives to meet the ambition of becoming a global battery hub for electric vehicles. Its decision to ban exports of nickel ore since 2020 has prompted the European Union to raise complaint with the World Trade Organization. 

The country wants to expand its role as a major source of nickel for EV batteries as demand for greener transport skyrockets across markets like the US, China and Europe.

OPEC, short for Organization of Petroleum Exporting Countries, includes the biggest oil producers such as Saudi Arabia and other middle eastern countries. The influential alliance coordinates supply and prices of oil among members.

“Through such collaboration, we hope all nickel producing countries can benefit from the creation of additional value of the commodity, equally,” said Lahadalia. 

The government is approaching Canada and Australia being among the world’s top ten producers of nickel, he added. 

“This collaboration will be mutually beneficial and will also follow the international trade rules,” he said in a video statement on Thursday. Indonesia will wait for feedback from both governments to get inputs on the alliance idea, Lahadalia said.

Indonesia also discussed speeding potential trade agreement with Canada in the meeting, he added. Both countries need to cooperate and explore opportunities to collaborate, Canadian Minister Ng said in the Indonesian government statement that wasn’t specific to the cartel idea. 

Indonesia and Canada have similar vision to optimize natural resources for economic benefit in a sustainable way, she added.

--With assistance from and .

(Updates with minister’s comment on talks with Australia in second paragraph.)

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