COP26 commitment threatens nation’s nickel, copper reserves, key NMC battery components
Indonesia’s pledge, along with 124 other countries at the 2021 United Nations Climate Change Conference (COP26) in Glasgow November 2, to end deforestation by 2030 and restore damaged land in developing countries will likely pose a risk to the continued development of the country's electric vehicle (EV) supply chain as it could result in more red tape when establishing new nickel mines and see its miners come under increased pressure from automakers to stem deforestation, according to a Fitch Solutions research report.
The country, which has the third-largest rainforest area globally, has significant reserves of nickel and copper, both key components of EV batteries. It accounts for roughly 30% of the world’s nickel mine production and is home to 22% of the world’s known nickel reserves, ahead of Australia and Brazil.
Indonesia produced 760 kilotons of nickel in 2020 alone. As a result, it is a critical player in the supply of raw materials for the nickel, cobalt and manganese (NMC) battery chemistry that has gained traction over the years with the latest NMC 811 (8 parts nickel, 1-part cobalt and 1-part manganese) chemistry being sought after due to increased range capabilities.
“This means that while we believe Indonesia's EV battery industry still has significant development ahead, the pace at which the local battery supply chain develops will likely be slowed down by the pledge to...
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