The Indonesian government is intensifying its efforts to secure United States investment in the country’s electric vehicle (EV) battery ecosystem and critical minerals sector, positioning the offer as part of ongoing bilateral tariff negotiations.
Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed on Monday that the newly established state asset fund, Danantara, will participate in the proposed mineral ventures. “The investment is intended for brownfield critical mineral projects in Indonesia. We are explicitly offering these to the United States,” he stated. While specific projects were not disclosed, the initiative focuses on expanding existing operations rather than initiating new developments.
Indonesia, the world’s largest producer of nickel and holder of the largest known reserves globally, aims to leverage its resource base to scale up EV battery production, a sector where US manufacturers such as Tesla Inc. remain heavily reliant on nickel supplies.
President Prabowo Subianto officially commenced construction of a US$5.9 billion EV battery facility in Karawang, West Java, over the weekend. The plant will be operated by a joint venture between the Indonesia Battery Corporation and Chinese battery manufacturer Contemporary Amperex Technology Co Ltd.
Minister Airlangga also emphasised the strategic value of investment in critical minerals, citing its importance for key sectors such as electronics, defence, and aerospace. “All of them require copper and cables. We already produce copper cathodes, and American firms are integrated into that ecosystem,” he said, referencing the presence of US interests in PT Freeport Indonesia.
The proposal aligns with Indonesia’s earlier commitments to the United States, including measures to boost imports of US-manufactured food and energy products, ease import restrictions, and facilitate Indonesian outbound investment into the US to help balance the trade relationship. These measures are designed to address Washington’s concerns and avert the imposition of steep reciprocal tariffs.
Negotiations remain under pressure as more than 60 days have passed since both parties agreed to conclude talks within that period. The US granted Jakarta a grace period to resolve the matter and avoid a proposed 32 per cent import tariff on Indonesian goods. A 90-day pause on tariff implementation is currently in place and is due to expire on 9 July.
In anticipation of the deadline, the Indonesian government has announced new import regulations aimed at easing access to raw materials and lowering non-tariff barriers. Airlangga noted that these regulatory reforms form part of the broader negotiation strategy with Washington. “Deregulation will be conducted in stages. We have already implemented certain measures, while others will depend on the outcome of the negotiations,” he said.
US President Donald Trump has indicated there will be no extension to the current 90-day tariff reprieve beyond 9 July. Without a bilateral agreement, elevated trade penalties are expected to come into force.
-The Jakarta Post
