Jakarta. Indonesia’s business lobby group Kadin and the Western Australian government inked on Tuesday an action plan aimed at power investment cooperation on critical minerals as the Southeast Asian nation develops its electric vehicle (EV) ecosystem.

The signing took place during President Joko “Jokowi” Widodo’s Sydney trip. The action plan also followed an earlier memorandum of understanding (MoU) between the two signatories that aimed to explore partnerships in critical mineral supply chains.

“This [cooperation] is pivotal to Indonesia’s EV ecosystem,” Kadin chairman Arsjad Rasjid said in a recorded press statement.

“Hopefully, the agreement can help push Australian and Indonesian companies to work together on building a critical mineral industry that encompasses mining and processing. Lithium is a mainstay ingredient in battery production. We hope we can also build synergy on other critical minerals to create added value for both countries,” Arsjad said.

The agreement is also expected to pave the way for Australian businesses to invest in Indonesia’s mining sector and vice versa. 

According to the Western Australian government, the 2023-2025 Plan of Action encompasses three pillars of cooperation, among others, the development of a resilient and sustainable supply chain. Under this action plan, the close neighbors will work on supporting strong environmental and social governance outcomes, while also growing a skilled workforce. Both sides will have high-level meetings to put this plan into action.

Western Australia accounts for half of the world’s lithium production. It is also a major exporter of nickel, cobalt, manganese, and rare earths. In 2021, all of the country’s lithium production came from Western Australia.

"We are 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,” Western Australian Premier Roger Cook was quoted as saying on the government’s official website.

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

Indonesia and Australia are rich in minerals that are key to EV battery production.

The two countries are home to the world’s largest nickel reserves, which stand at 21 million metric tons respectively, according to the 2023 US Geological Survey report. 

The report also shows that Australia’s lithium reserves stand at 6.2 million metric tons. Australia’s lithium production also grew from 55,300 metric tons in 2021 to 61,000 metric tons the following year.

Read More: Market Size for Indonesia's EV Ecosystem Predicted to Top $20b by 2030

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