Wyloo, Chalice, BHP sound alarm over Biden’s Jakarta nickel deal

afr.com:

Some of Australia’s largest nickel producers are increasingly concerned that the Biden administration will allow their big Indonesian rivals access to incentives under the Inflation Reduction Act – a huge subsidy to encourage the transition to clean energy – as early as next month.

Luca Giacovazzi, the chief executive of the Forrest family’s Wyloo Metals, has warned that any agreement that made Indonesian nickel companies eligible for the funding package would make it hard to justify investment in Australia and Canada because of the higher costs of production.

Workers explore for nickel ore in Sulawesi, Indonesia. Australian miners are concerned that Indonesia’s producers will get access to US subsidies.  Getty

“If the world wants batteries and EVs to be both affordable and environmentally sustainable, investment in Australian and Canadian production must be encouraged,” Mr Giacovazzi said.

“A free-trade agreement on nickel with Indonesia would significantly reduce the attractiveness of investing in countries with higher ESG standards and leave consumers with no choice but to use dirty nickel.”

Chalice Mining, which is working on the Gonneville nickel and copper project in Western Australia, is another group along with BHP that is concerned about the impact on local production if Indonesian groups are provided access to the subsidies. The Biden administration’s IRA is an attempt to accelerate the energy transition in the US and to secure sufficient supplies of the resources needed for lower-emission technologies.

Under the IRA, car manufacturers are offered incentives to produce electric vehicles but must use materials produced in the US or in countries that have special agreements. Indonesia has the largest reserves of