Indonesia’s Investment Minister Bahlil Lahadalia proposed the idea of creating an OPEC-like cartel for battery metals in an interview with the Financial Times.

The world’s largest nickel producer has hinted at early plans to replicate what OPEC has achieved for the oil industry since its inception in 1960. The investment minister revealed that Indonesia is studying the potential to establish a similar alliance relating to its production of nickel, cobalt, and manganese battery raw materials. However, the concept is still in the early stages of development, and no other nickel-producing countries are reported to have been contacted.

Indonesia has reaped the rewards of its tough mineral export policy, first banning shipments of unprocessed nickel ores and concentrates in 2014. Since then, there has been massive investment in the country to develop an integrated stainless steel industry as well capacity to produce battery-grade nickel.

Seemingly charged by the success of its strict export policy, Indonesia is now looking to stamp its authority on the EV battery supply chain amid rising demand. However, unlike OPEC’s state-owned oil producers, Indonesia’s plan is complicated by the fact that investment in its nickel industry has been made by private companies with the majority coming from China. Additionally, the other main nickel-producing nations are Canada, Russia, the Philippines, and Australia, each with their own geopolitical and market-based agendas.

There are also ESG considerations following Indonesia’s rapid rise in processed nickel output, based on laterite mining. Producers in Canada and Australia have increasingly sought to sell their nickel products, almost entirely based on sulphide ores, to ESG-conscious OEMs as the ‘green alternative’, championing lower carbon footprints and reduced tailings/waste concerns. At first glance, it seems counterintuitive that these producers would be willing to dilute this competitive advantage.

These are early days. Once Indonesia shores up its plans, attention will turn to how receptive the proposed partner nations will be.