Tesla Has Signed A $5 Billion Nickel Deal With Indonesia. The Seller May Be A Chinese Company

Indonesia's Coordinating Minister of Maritime Affairs and Investment, LuhutPandjaitan, said in an interview on August 8 that Tesla has signed a five-year procurement contract with Nickel Processing Company Morowali in Sulawesi, Indonesia.

将用于镍特斯拉的锂离子蝙蝠teries. According to Pandjaitan, the contract is worth about $5 billion.

"We are still in talks with Tesla, but they have already started buying products from Indonesia," he said.

But as early as last week, Tesla announced that it would sign a supply framework agreement with Chinese companies Huayou Cobalt and Zhongwei, which will supply Tesla with three-way battery material precursors, namely nickel, cobalt and heavy metal.

The two companies own nickel smelting production lines in Indonesia's Morowali Industrial Park. Some investors speculate that Indonesia's so-called $5 billion deal is likely to refer to this deal.

Indonesia has sought co-operation in nickel

In May, Indonesian President Joko Widodo traveled to Texas to meet with Tesla CEO Elon Musk to discuss possible investments in Indonesia.

At that time, the two sides discussed potential investments in nickel in Indonesia and the supply of batteries for electric vehicles. In addition, the Indonesian side also wants to have a deep cooperation with Musk's other company SpaceX in aerospace, urging Musk to build a rocket launch site in Indonesia.

Indonesia's investment minister BahlilLahadalia said at the time that Tesla was interested in building a battery and electric car factory in Indonesia.

Global nickel reserves stood at about 95 million tonnes at the end of 2021, with Indonesia and Australia having the largest reserves. Nickel, as one of the key materials of new energy vehicle batteries, is also one of the bottlenecks limiting the capacity of new energy vehicles.

Since January 2020, the Indonesian government has banned the export of nickel ore altogether, in an effort to foster a homegrown battery production chain for electric vehicles.

Details of Tesla's $5 billion deal in Indonesia were not disclosed, and it is unclear whether it will include industrial facilities such as a battery factory. Indonesia's own weak industrial base may be one reason for Tesla's hesitation.

In addition, environmental groups in the United States and Indonesia had earlier complained to Tesla that Musk's nickel development in Indonesia would affect the local environment.

But Musk said the first order of business for Tesla to expand capacity is to buy more nickel.