Indonesia’s president, Joko Widodo, met with Tesla CEO Elon Musk in Texas on May 14 local time, the Indonesian government said in a statement, the two sides discussed potential investment and technical cooperation.

Indonesia’s president, Joko Widodo, met with Tesla CEO Elon Musk in Texas on May 14 local time, the Indonesian government said in a statement, the two sides discussed potential investment and technical cooperation.

After a special asean-us Summit in Washington from May 12 to 13, Indonesian President Zoco visited Space X’s rocket factory in Boca Chica, Texas. During the meeting, Zoco invited Elon Musk to visit Indonesia in November, when the Indonesian island of Bali will host the G20 summit.

For years, Indonesia had been trying to reach an agreement with Tesla on a battery investment and wanted to partner with Musk’s space exploration technology company, Zoco, who had proposed to Elon Musk the establishment of a rocket launch site in Indonesia. Elon Musk expressed interest in Indonesia’s future, the government statement said: “Indonesia has great potential for development and there is room for cooperation in many areas.”

Musk had been in talks with India about setting up a production base in the country, but high import tariffs and a lack of an ecosystem to support the sale of electric cars have worried musk, he is currently in Asia looking for the best location for Tesla’s new factory.

Tesla’s representatives visited the Morawali nickel production center on the Indonesian island of Sulawesi last week before the meeting between Musk and Zoco, according to Indonesian officials and people familiar with the matter, and held working-level talks on potential investment in Indonesia’s nickel industry and battery supply for electric vehicles.

“they [ Tesla ] are very satisfied with the data they have received so far,” Luhut Binsar Pandjaitan, Minister for Coordination of Investment and maritime affairs, told a media briefing.

Luhut met Musk in Texas in April. Since then, he has said publicly on social media, “hopefully this will not be our last meeting and there will be further discussions on the development of the Indonesian nickel industry, where high technology can bring Indonesia into the global supply chain of the electric vehicle industry.”

“one of the factors musk is considering investing in Indonesia is the huge reserves of batteries of nickel, manganese and cobalt,” said Rosan Roeslani, Indonesia’s ambassador to the US, “as well as investing in a battery plant, Musk is also interested in building a Tesla electric car plant in Indonesia for the Asian market.”

Nickel is mainly used in the production of stainless steel and ternary lithium batteries. The so-called three-component lithium battery, lithium battery cathode contains nickel, cobalt, manganese three elements of the “three-component precursor.”. Upstream raw materials, nickel accounted for nearly 30% of the total cost of batteries, high nickel, ultra-high nickel batteries accounted for more. Because of the advantages of nickel, high-nickel batteries are becoming an important development direction of ternary lithium batteries.

At the moment, all of Tesla’s models carry three way lithium ion batteries. As a result, Elon Musk has said more than once that he values nickel resources. He thinks lithium makes up only about 2% of the battery, despite its name, lithium-ion battery. Technically, it should be called a “nickel-graphite” battery, because the entire battery is an important component of nickel.

“by asking all miners to mine more nickel in an environmentally friendly manner and to maintain an efficient supply, Tesla will provide a substantial long-term supply contract,” Musk said on a Tesla earnings call

Unlike most carmakers, Tesla has worked hard in the battery and raw material supply chain for years. Since 2021, Tesla has been investing in upstream resources around the world, signing supply agreements with a number of nickel suppliers.

In January, Tesla pledged to buy 75,000 tons of nickel concentrate from Talon Metals’project in Minnesota. Tesla had previously signed a deal with BHP Group, the world’s largest mining company, to supply nickel from Australia and a nickel operator in the New Caledonia.

Vale, the Brazilian mining giant, recently announced a long-term nickel supply deal with Tesla. Vale will supply Tesla with nickel from its Canadian mines. It is understood that Vale in Indonesia has also set up a nickel business.

Indonesia is Southeast Asia’s largest economy, one of the founding members of the Association of Southeast Asian nations, and the world’s most nickel-rich country. According to the U.S. Geological Survey, the world’s nickel reserves will be about 94 million tons in 2020, with Indonesia topping the list at 21 million tons, or 22 percent of the total. 2021, which accounts for 37% of the world’s nickel production, is the world’s largest.

Indonesia has been working to develop a nickel-based electric car industry, spanning the entire supply chain from manufacturing nickel metals to producing battery modules to assembling electric cars. Indonesia has struck multibillion-dollar deals for the use of nickel resources with companies from China and South Korea, two of the world’s biggest battery makers.

Qingshan group, China’s largest producer of nickel and stainless steel, is the first domestic enterprise to locate the local laterite nickel smelting resources in Indonesia. Aoyama group and Cobalt Giant Huayou Cobalt (603799) have jointly invested in a number of laterite nickel smelting projects in Indonesia, the two sides have also jointly developed Indonesia’s largest nickel, chromium and iron resource complex — the Weidabe Industrial Park — with Zhenshi Group and Ningde Times.

Aoyama has been involved in the new energy sector since 2017, and in 2018 became the world’s leading supplier of power batteries to Ningde Times (300750) . After the Ningde Times, greenmay joint investment of about 1.85 billion yuan to build Indonesia “annual production of 50,000 tons of high nickel power ternary materials used precursor raw materials and 20,000 tons of ternary cathode materials” project.

In April, Ningde Times announced a nearly $4 billion project to build a power-cell industry chain in Indonesia, joint venture with PT Aneka Tambang (Antam) and PT Industri BATERAI Indonesia (IBI) to build six sub-projects including laterite nickel mine development and smelting, battery and cathode material manufacturing, battery recycling.

Meanwhile, a South Korean consortium led by LG New Energy, the world’s second-largest battery maker, has invested in about $9 billion worth of battery supply chain projects in Indonesia, and signed a preliminary agreement with Indonesian state-owned enterprises.

Notably, Huayou Cobalt, Ningde times and LG New Energy are among Tesla’s long-term suppliers. Ningde times has been Tesla’s power battery supplier since 2020 and Tesla has become Ningde Times’biggest customer. LG New Energy mainly provides power batteries for the Tesla Model 3.

Huayou Cobalt has been on Tesla’s supplier list since 2020. In April, Huayou and Vale, also on the list, signed a cooperation framework agreement to work on a high-pressure acid-leaching project using limonite ore as raw material, the project is designed to produce nickel(II) hydroxide cobalt products (MHP) of up to 120,000 tonnes of nickel metal per year.

Sumitomo Metal Mining, Japan’s largest metal smelter, said global demand for nickel batteries is expected to grow by more than 20 percent in 2022 due to strong demand for electric vehicles, 2021 is expected to climb from nearly 330,000 tonnes to more than 410,000 tonnes. Demand for nickel in the global battery industry will jump to about 1.5 million tons by 2030, according to Bloomberg New Energy Finance.