Indonesia’s government chief said the country may impose tariffs on nickel exports this year as it considers processing more nickel domestically. Indonesia is the world’s largest producer of nickel, a key metal used to make batteries for electric vehicles. The comments by Indonesia’s leader came after an Indonesian government official said in early 2022 that Indonesia was considering progressive tariffs on nickel pig iron and ferronickel.
The global popularity of electric vehicles has fueled demand for battery metals, including nickel, lithium and cobalt. Indonesia is expected to play a larger role in the electric vehicle supply chain and eventually suspend all raw material exports.
Indonesia wants to increase domestic value to create more employment opportunities, he said, “We want to do this with bauxite, copper, tin, crude palm oil, and others as well.”
The Indonesian leader has invited Tesla, a major U.S. electric vehicle company that makes electric vehicles and batteries. In May, state leaders met with Tesla CEO Elon Musk to encourage Tesla to invest in Indonesia.
Nickel is one of Indonesia’s most important exports, along with coal and palm oil. Earlier this year, Indonesia shocked the global market by temporarily suspending palm oil exports to curb inflation after prices for consumer goods in various countries skyrocketed, raising fears of a sharp rise in inflation.