China and Indonesia Strengthen Cooperation in Critical Minerals and Renewable Energy

China and Indonesia are deepening their strategic collaboration in critical minerals and renewable energy, reflecting the global push toward clean energy and sustainability. The formal announcement came during Indonesian President Prabowo Subianto’s visit to China from November 8–10, 2024. This cooperation is centered on expanding joint initiatives in new energy vehicles (NEVs), lithium batteries, photovoltaics, and other critical mineral sectors essential for the global clean energy transition.

Expanding Strategic Agreements and Energy Investments
A key highlight of this partnership is the focus on energy transformation. China has reaffirmed its commitment to supporting Indonesia’s energy sector development by forming “high-quality” partnerships, particularly in clean energy, infrastructure, and digital economies. A significant milestone from President Prabowo’s visit was the agreement for a high-pressure acid leaching (HPAL) project in Sulawesi, co-developed by Green Eco-Manufacture (GEM) and Vale Indonesia. The project is expected to produce mixed hydroxide precipitate (MHP), a critical material used in manufacturing EV battery cathodes. This move solidifies Indonesia’s position in the growing EV supply chain, particularly in the context of rising global demand for electric vehicles.

Indonesia’s Key Role in Nickel and Aluminium Supply Chains
Indonesia’s increasing role in global critical mineral markets is undeniable. As the world’s largest producer of nickel, the country is central to the growing demand for materials crucial to electric vehicle (EV) batteries. According to projections, Indonesia will account for over 60% of global nickel production by 2025, largely driven by Chinese investments in mining operations. Additionally, the aluminium industry in Indonesia is experiencing similar growth, with Chinese firms like Nanshan Aluminium, Chalco, and Tianshan Aluminium expanding operations in the country. These investments include new alumina refineries and aluminium plants, which will contribute significantly to meeting the global demand for these materials, vital for the energy transition.

Growth in Lithium and Battery Materials Production
Another major development is the expansion of lithium iron phosphate (LFP) production capacity in Indonesia. Chinese company Changzhou Liyuan, in partnership with the Indonesia Investment Authority (INA), is scaling up its LFP plant in Indonesia. The facility, expected to be the largest of its kind outside of China by 2025, will boost production capacity from 30,000 tons per year to 120,000 tons. This increase in LFP production is expected to play a crucial role in the global battery supply chain, reinforcing Indonesia’s position as a vital player in the renewable energy and EV markets.

These initiatives highlight the growing interdependence between China and Indonesia, particularly in critical minerals, as both countries position themselves as key contributors to the global energy transition. With increased investments and large-scale projects, China and Indonesia’s partnership is strengthening their roles in the global renewable energy market.