Indonesia restructures nickel projects to reduce Chinese investment
Time:Thu, 01 Aug 2024 11:34:07 +0800
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Indonesia is restructuring its nickel mining and processing projects to reduce Chinese investment, aiming to qualify for US tax breaks under the Inflation Reduction Act (IRA) from 2025. The IRA excludes electric vehicles (EVs) with critical minerals linked to "foreign entities of concern."
To attract these tax credits, Indonesia is making Chinese companies minority shareholders in new investments. As the world's largest nickel supplier, Indonesia has seen a significant Chinese capital influx. However, the IRA stipulates that EV batteries with over 25% Chinese ownership will not benefit from tax breaks.
Indonesia's authority stated that officials are negotiating with investors to build new smelters where Chinese companies hold less than a 25% stake. This includes a US$700 million smelter project with partners from Indonesia, South Korea and a minority Chinese interest.
