Freshly re-elected Australian Prime Minister Anthony Albanese flew to Jakarta for the Australia-Indonesia Annual Leaders’ Meeting, focusing on critical minerals and green energy projects.

Albanese aims for Australia to challenge China’s control of critical minerals, with a particular focus on nickel. Indonesia, with vast nickel reserves, is the world’s largest producer of the metal.

Indonesia’s nickel production surged in recent years, leading to a global surplus and collapsing prices. This prompted the closure of mines in Australia and New Caledonia, increasing Indonesia’s dominance in the nickel market.

To navigate the challenging nickel market, Australian companies have formed joint ventures with Chinese counterparts, securing stakes in Indonesian projects. Indonesia aims to promote domestic processing through restrictions on raw material exports. Indonesia’s hilirisasi policy aims to reduce reliance on coal by processing mineral resources for green industries like EVs. Environmental concerns arise as nickel mining damages ecological sites like the Raja Ampat archipelago, prompting government action to revoke permits. ESG standards are voluntary, hindering foreign investment and growth in the nickel market.

Australia eyes Indonesia’s nickel for critical minerals, but challenges like production surplus, fluctuating prices, and ESG compliance remain. Government and mining sector cooperation is crucial for market success. Despite environmental concerns, diplomatic support for nickel mining remains strong, highlighting the complex balance between economic gains and environmental protection.

Read more at Yahoo Finance: Australia eyes Indonesia’s nickel in its play for critical mineral supremacy