(Daily Caller News Foundation) — The Biden administration is reportedly seeking to secure a nickel deal with Indonesia after endeavoring to restrict domestic nickel mining projects.
While negotiations have not advanced far, there is mutual interest in advancing a trade deal that would allow the U.S. to more easily access Indonesia’s immense reserves of nickel, which is a critical material for electric vehicles (EVs), Reuters reported on Sunday, citing anonymous officials familiar with the situation. The administration’s efforts to work with a foreign country on sourcing nickel follows its push to kill domestic mining projects in Minnesota.
“Since taking office, President Biden has chosen to rely on foreign countries with poor environmental and labor standards for the critical minerals necessary for his EV mandates,” Republican Rep. Pete Stauber of Minnesota, whose district would have benefitted from one of the tanked mining projects, told the Daily Caller News Foundation. “These reported negotiations with Indonesia are just the latest example of Biden’s ‘anywhere but America, any worker but American’ mining policy.”
“It is hypocritical for someone who claims to care about the environment to make deals with countries like Indonesia and the Democratic Republic of the Congo when American miners — like those living in Minnesota’s 8th Congressional District — are ready to safely and responsibly produce these resources under the strongest environmental and labor standards in the world,” Stauber added.
President Joe Biden was reportedly set to discuss the possibility of a nickel deal with Indonesian President Joko Widodo on Monday when he came to the White House, according to Reuters. Biden and his team are reportedly entertaining a deal, especially if they can address concerns about protections for Indonesian workers and the environment.
Before pursuing a deal with Indonesia, the administration halted major nickel mines in Minnesota, citing concerns for their environmental impacts.
In January, the administration effectively blocked a Twin Metals mine in Minnesota which would have produced key materials, including nickel. Subsequently, in June of this year, the Army Corps of Engineers rescinded a Clean Water Act permit that had been issued for the NewRange copper and nickel mine in Minnesota’s Duluth Complex.
In such a deal, the Indonesian nickel exports would be able to access federal tax credits made available by the Inflation Reduction Act (IRA), which allows for foreign products to be subsidy-eligible if they come from a friendly country that has a trade deal with the U.S. and meets other requirements, according to Reuters. The administration is seeking avenues to make sure that nickel mined in Indonesia but processed in China does not end up benefiting from IRA subsidies.
Indonesia and China jointly controlled about 50% of the world’s nickel refining capacity as of 2022, according to a report by the International Energy Administration. Chinese firms poured $3.6 billion of investment into the Indonesian nickel industry in the first half of 2022, and there have been 25 proposals to build plants to refine battery-grade lithium; of those proposals, only three do not involve any Chinese firms, according to Foreign Policy.
Because of its importance in building lithium-ion batteries, nickel is poised to play a key role in the Biden administration’s EV agenda, which features an ambitious target to have 50% of new car sales be EVs by 2030. The administration has poured billions of dollars into building up supply chains and regulated aggressively in order to help reach that goal.
A bipartisan group of nine senators wrote a letter to some of Biden’s most important advisers on Oct. 24 to express their concerns about a potential deal because a “full accounting of the domestic sourcing opportunities, both short- and long-term has not been adequately developed, and the sourcing opportunities from countries that presently have a free trade agreement and qualify under the common-sense meaning of that term has not been provided,” according to its text.
The senators further outlined their worries that Indonesia has inadequate protections for workers, a higher potential for mining activity to cause more pollution and concerns regarding China’s dominance of its nickel extraction and refining industries, according to the letter’s text.
The White House did not respond immediately to a request for comment.
