One of the biggest beneficiaries of the electric vehicle revolution and the broader green energy transition has been Indonesia. Blessed with some of the world’s most needed metals – the world’s largest reserves of nickel (equal with Australia) and the world’s third-largest reserves of cobalt – it has become a key supplier to the world.
By 2030, this analysis from The Economist suggests, Indonesia will be the fourth-largest producer of green commodities in the world after Australia, Chile and Mongolia.
However rather than exporting raw materials to be processed in other parts of the world, Indonesia’s President Joko Widodo wants to build those industries at home. Indonesia bans the export of unrefined ore, so for foreign companies to access their minerals they must process them onshore.
The world’s largest producer of nickel, China’s Tsingshan Group, is processing nickel on the island of Sulawesi. Indonesia’s Adaro Energy is planning to produce green aluminium in West Kalimantan. South Korean companies LG and Hyundai have partnered to build Indonesia’s first EV battery-cell plant in Java. And Tesla has been offered land to build a factory in Java as well.
Indonesia is developing, quickly, and is primed for a demographic dividend. It is the fourth-largest country by population, with 276 million people, and 26% of the population is under the age of 15. As this population hits working age, combined with this green metals boom and the emerging digital economy (led by GoTo, the eCommerce giant whose turnover is equivalent to 3% of Indonesian GDP), Indonesia appears primed for an economic boom. But, as this article from The Economist explains, the biggest risk is that Indonesia’s politicians and deep-pocketed vested interests get in their own way.
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