Western Australia and Indonesia sign partnership to boost critical minerals trade

Western Australia’s miners have welcomed a new agreement between the state and Indonesia to create further critical mineral development opportunities.

Western Australia, currently one of the world’s leading critical minerals producers, has signed a ‘plan of action’ with Indonesia to maximise opportunities in value-added critical minerals and battery industries.

WA Premier Roger Cook signed the plan which follows up the reaching of a memorandum of understanding (MoU) with the Indonesian Chamber of Commerce and Industry (KADIN) earlier this year.

That MoU provided a framework for the supply chains of critical and battery minerals to Indonesia while promoting investment and collaboration opportunities.

New plan an important step forward

Chamber of Minerals and Energy of Western Australia’s (CME) chief executive, Rebecca Tomkinson, said the new “plan” is another step in strengthening WA’s role in the global transition to net zero.

“The synergies between economic development strategies in Indonesia and those in Western Australia present important opportunities for closer cooperation,” Ms Tomkinson said.

“For example, Indonesia’s industrial down-streaming economic strategy unveiled in August 2021, includes the development of further manufacturing, processing and refining capability to convert locally sourced raw materials (e.g. nickel, bauxite, gold and copper) to semi-finished or finished goods exports, particularly those related to critical and battery minerals.”

The manufacturing sector is the largest export sector in Indonesia, accounting for 71.65% of total exports in USD from January to July 2022.

The WA Chamber believes that new opportunities may exist for the state to supply critical inputs or secure outputs from the Indonesian market for downstream minerals processing.

“This will be particularly relevant if Indonesia realises its ambitions to build a green industrial park which will use new renewable energy or green energy to produce green products, and provide opportunities for Western Australian businesses to further decarbonise their supply chains,” Ms Tomkinson said.

Three step plan

The 2023-2025 Plan of Action has three pillars of cooperation which are to “develop resilient and sustainable supply chains, support strong environmental and social governance outcomes, and grow a skilled workforce.”

Planned activities will include high level meetings, business forums and the commissioning of strategic analysis to identify future opportunities for WA and Indonesia to collaborate under those three pillars.

The agreement will also further strengthen Western Australia’s economic ties, trade, and supply chain opportunities with Indonesia.

Premier committed to growing WA critical mineral opportunities

Premier Cook’s signing of the agreement follows an official mission to Jakarta last year to grow business and government relationships.

“Western Australia is already firmly established as a global leader in the supply of critical minerals and rare earths, with lithium hydroxide and other critical minerals processing quickly becoming established in our state.”

“We’re committed to growing the state’s participation in global battery and critical mineral supply chains, with a view to further developing our value-adding and manufacturing industries.”

“Working with Indonesia, an important trading partner and our closest neighbour to explore partnerships, share information, knowledge and strategies and facilitate business links will fuel our mutual economic growth and green ambitions.”

Labour market opportunities

The WA Chamber has identified the Indonesian labour market as an opportunity for the two regions to engage on skills, while supporting Australian mining contracting companies already operating in Indonesia.

The CME made a parliamentary submission in late 2022 which called on the government to facilitate opportunities for Western Australia to supply critical inputs or secure appropriate outputs from Indonesian market for the manufacturing and minerals processing market.

“Western Australia is already a world leading jurisdiction for the upstream production and refining of critical and battery minerals globally, a factor that will continue to increase in importance to our nation’s trade partners, such as Indonesia,” Ms Tomkinson said.

“There is an enormous opportunity for WA to have a world-leading, sustainable, value-adding critical minerals sector, but the window to capitalise on global critical minerals demand unlocks the state’s potential as a major participant in the supply chain is narrow. We must capitalise on the opportunities in front of us right now.”

WA currently provides half of global lithium production and is a major exporter of nickel, cobalt, manganese and rare earths, with critical minerals processing and other value-adding industries rapidly emerging.