EU Sues Indonesia Over Nickel Trade, Due To Tesla?

Nickel mining activities (Photo: Special)

JAKARTA - The government, through the Ministry of Trade, has stated that it is ready to make efforts to defend the European Union's (EU) lawsuit over the DS 592 - Measures Relating to Raw Materials dispute.

Minister of Trade (Mendag) Muhammad Lutfi said Indonesia has always fought for the natural resources and wealth of the archipelago for the advancement of the nation.

"The government and all stakeholders believe that the policies and steps taken are consistent with the principles and rules of the World Trade Organization (WTO)," he explained as quoted by VOI, Sunday, February 28.

The Trade Minister explained that this stance was taken because the EU for the second time requested the formation of a DS dispute panel at the WTO Dispute Resolution Board regular meeting on February 22, 2021.

The actions of the blue continent authorities are a continuation of their first stance that highlighted Indonesia's policy in the mineral and coal sector by formally submitting a request for consultation under the dispute resolution mechanism at the WTO at the end of November 2019.

"Indonesia has rejected that request at the WTO meeting in January 2021 because it believes that its policies are in accordance with the provisions and mandate of the constitution of the world trade organization," he said.

The government's firm stance ultimately reduced the EU's lawsuit by covering only two issues, namely the ban on nickel exports and domestic processing requirements.

For information, this dispute originated from the narrative carried out by the European Union on the pretext that Indonesia's nickel production has the potential to destabilize the availability of raw materials for its industrial needs. Another thing they put forward to the public is that Indonesia's policy is a form of distortion to international trade.

"For Indonesia, the EU is clearly trying to obstruct the efforts of a sovereign state in managing its own natural resources," said the Trade Minister.

To note, Indonesia controls 30 percent of the world's nickel reserves and resources. The amount is estimated at 21 billion tonnes.

Based on the mapping of the Geological Agency, which was quoted on the Ministry of Energy and Mineral Resources' website, in July 2020 Indonesia had nickel ore resources of 11,887 million tons. Meanwhile, the total metal resources in Indonesia reached 174 million tons and 68 million tons of metal reserves.

The abundant nickel content in the country has made the famous electric car manufacturer Tesla interested in investing in Indonesia. This was realized by the government's agreement to enter the Tesla supply chain to supply electric car batteries at the company owned by Elon R. Musk.