Arcandra Tahar Analyzes Tesla's Reasons For 'Step Over' Indonesia To Buy Nickel From Australia

JAKARTA - Former Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar gave his analysis regarding the signing of a nickel purchase agreement by Tesla from Australian mining company BHP.

According to him, in addition to supplying nickel, Tesla and BHP will also cooperate in developing environmentally friendly energy storage.

“Why did Tesla choose nickel mines in Western Australia and not in other countries? No one knows for sure why this very strategic collaboration began. However, there are several things that can be an indication of why Tesla chose BHP," he said via his personal Instagram account @arcandra.tahar as quoted on Wednesday, July 28.

In the upload, Arcandra at least gave four reasons why this collaboration could occur.

First, pressure from shareholders for Tesla to show effort and participate in reducing the impact of climate change. BHP is one of the mining companies that cares deeply about the environment and has succeeded in becoming a nickel miner with the lowest CO2 emissions.

"They are committed to managing environmentally friendly mines using renewable energy," he said.

Second, the common vision between Tesla and BHP in overcoming the problem of environmental damage due to business activities that are not environmentally friendly. Tesla and BHP are committed to having a sustainable and reliable business, so that their business activities can last a long time.

"The foresight of these two companies will strengthen their position in the eyes of investors," he said.

Third, this cooperation will increase the share value of the two companies. You can imagine how investors will react if Tesla cooperates with nickel miners who are not environmentally friendly. Tesla may get a cheaper nickel price, but if the value of the stock drops, it will be a big loss for Tesla.

"Minang people say, Tesla loses to buy but wins to use. The same applies to BHP," he added.

Arcandra mentioned that if BHP sells nickel to a company that doesn't care about the environment, the value of BHP's shares could fall.

“This is a future phenomenon that must be faced by world companies that have gone public. They have to care about the environment if they don't want to be left behind by investors," he said.

Fourth, there is a genuine effort from the Australian government to help their mining companies participate in reducing the negative impacts of climate change.

“They realize that in the short term there will be more costs for environmentally friendly miners. But the government is present through fiscal incentives that can ease the burden on the company. This is the key to building a sustainable and reliable business world. Don't be forced to go through difficult roads with blurry roadmaps," he explained.

Furthermore, he revealed that the higher labor costs in Australia had no effect on the entry of investors there. At least not as a determining factor for investors to invest there.

Investors, he said, are more interested in environmentally friendly companies and business opportunities.

“World-class companies are very smart in collecting accurate data on a company's commitments including business practices that they usually do in a country. This is a new era that is open and transparent," he said.

As is known, some time ago there were rumors that Indonesia would be included in one of Tesla's production chains, especially in terms of manufacturing electric car batteries, because they are considered to have large nickel reserves.

However, this has not yet been realized. In fact, Tesla reportedly chose Bangalore in India as one of Tesla's development centers outside the United States.

"Hopefully we will be given the ability to learn from Tesla's collaboration with BHP in Australia," concluded Arcandra Tahar.