The US and Indonesian governments committed to developing a shared critical minerals action plan with the goal of establishing a minerals free trade agreement, US President Joe Biden and Indonesian President Joko Widodo said in a Nov. 13 joint statement after meeting at the White House.

A US-Indonesia free trade agreement, which is likely to center around battery metals, could open the door for automakers seeking US electric vehicle tax credits to use Indonesian metals including nickel in credit-eligible cars. As the world's biggest nickel producer, Indonesia could receive a large boost from such an agreement, although the move could also have a significant ripple effect throughout the nickel market.

"[Presidents Biden and Widodo] commit to work together to reduce supply chain dependencies and vulnerabilities, promote supply chain transparency, and expand access to secure and sustainable critical minerals sources," the leaders said in the Nov. 13 statement. "To advance this work, they commit to develop a critical minerals action plan that encompasses all of these lines of effort and seeks to increase high standard investment in the critical minerals sectors in both countries. They commit to pursue these efforts with a view toward establishing the foundation to launch future negotiations on a critical minerals agreement."

The two presidents did not publicly offer a timeline for when negotiations would occur or when a free trade agreement could be finalized. The White House did not immediately reply to a request for comment.

However, a free trade agreement could face opposition from miners and environmental groups alike. Producers in other nickel-rich nations such as Canada and Australia have concerns about an agreement, not only because it could draw attention away from the minerals markets of long-time allies but because they also see it as a way for Chinese producers with Indonesian investments to circumvent Inflation Reduction Act rules. There are also concerns about the environmental, social and governance standards of Indonesian mining operations.

In addition to holding talks on critical minerals supply chains, Biden is set to announce a memorandum of understanding between the US State Department and Indonesia's Ministry of Energy and Mineral Resources on sustainable energy and mineral development, the White House said in a Nov. 13 factsheet. The agreement will, in part, advance "technical cooperation on enabling environments and regulatory frameworks to help ... improve technologies for responsible mining and minerals processing [and] support Indonesia's development of a lower-emissions critical mineral sector," the White House said in the factsheet.

The White House did not specify an expected date for the announcement.

The factsheet also said the two presidents elevated US-Indonesia ties to a Comprehensive Strategic Partnership, outlining a set of priorities for future heightened collaboration.

"This will mark a new era ... in the relationships between the United States and Indonesia across the board, affecting everything," President Biden said during remarks before the bilateral meeting. "It includes expanding our work together to build a secure and resilient supply chain [and] it includes deepening our collaboration to combat the climate crisis."

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