Southeast Asia’s biggest economy has tried to convince Tesla to set up a production plant in the country, which has large nickel reserves. Chairman Joko Widodo met with Tesla founder Elon Musk earlier this year to boost investment.
“We are still in constant negotiation with Tesla (…) but they have started to buy two excellent products from Indonesia,” said Luhut Pandjaitan, minister in charge of the coordination of maritime affairs and investment, in a statement. an interview aired on Monday.
He said Tesla had signed a five-year contract with nickel processing companies operating out of Morowali on the island of Sulawesi. Nickel materials will be used in Tesla’s lithium batteries.
Tesla did not immediately respond to an email from Reuters seeking comment.
Indonesia is keen to develop electric vehicle and battery industries at home and has halted nickel ore exports to ensure supplies for investors. The move had successfully attracted investment from Chinese steel giants and South Korean companies such as LG and Hyundai.
However, most nickel investment so far has gone into the production of raw metals such as nickel pig iron and ferronickel.
The government plans to impose an export tax on such metals to boost revenue while further encouraging domestic production of higher value-added products, a senior official told Reuters last week.
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