Indonesia Mulls Free Trade Agreement With US For Critical Minerals: Report

Indonesia is planning a free trade agreement with the U.S. to export critical minerals.
The proposal is aimed at helping the companies that have electric vehicle supply chain operations to derive benefits from U.S. tax credits, reported Reuters.
Under the new guidance of the Inflation Reduction Act (IRA), tax credits require some EV components to be produced in North America or by a free trade partner.
The IRA rules aim to reduce U.S. dependence on countries like China to develop the EV battery supply chain.
Indonesia has the world's biggest nickel reserves, and the products are increasingly becoming important for EV battery makers.
"We do not have an FTA with them. Now we're proposing a limited FTA with them," the report quoted Indonesian minister Luhut Pandjaitan.
The FTA proposal will likely be similar to the one the U.S. has with Japan for critical mineral trade.
Ford Motor Co F had agreed with Indonesian mining company PT Vale Indonesia Tbk and Chinese mineral supplier Zhejiang Huayou Cobalt Co to partner in a $4.5 billion EV battery material plant.
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