The U.S. has approached Indonesia about joining the Mineral Security Partnership (MSP), a multinational collaboration aimed at accelerating the development of sustainable critical minerals supply chains. This comes as the two countries discuss a potential critical minerals deal.
U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez spoke to the Indonesian government about the MSP during his visit to Jakarta this week. The MSP, which currently includes 14 countries and the European Union, aims to facilitate financial and diplomatic support to improve environmental standards and governance in the mineral sectors of participating nations.
Indonesia, which has rich reserves of minerals such as nickel, copper and bauxite, is keen to promote itself as a production hub for batteries and electric vehicles. However, the country’s rapidly expanding nickel processing industry has faced criticism from environmentalists over issues like deforestation, water and air pollution caused by smelters.
“I believe this will lead to more investment in Indonesia, and not just any investment, but also investment that benefits communities, that upholds labour laws, that upholds environmental laws,” Fernandez said.
Indonesia has also asked Washington for a critical mineral trade deal similar to the one the U.S. has with Japan. Fernandez said the discussions on this are progressing positively, though he declined to provide a timeline on when a deal may be reached.
The U.S. official also revealed that Indonesia is one of seven countries the U.S. would support to become a semiconductor hub. This indicates the growing strategic importance of the Southeast Asian nation in the global supply chain for critical minerals and high-tech industries.
Overall, the U.S. approach to partner with Indonesia on critical minerals reflects Washington’s broader efforts to diversify and strengthen sustainable supply chains, particularly in the face of growing competition with China.