Tesla signs contract to buy Indonesia's nickel products worth 5 billion USD

U.S. electric carmaker Tesla Inc. has signed a deal worth 74.5 trillion rupiahs (5 billion U.S. dollars) to buy nickel products from two Indonesian producers, a minister said Monday.

"The contracts are applicable for five years with two companies operating in the Morowali regency (Central Sulawesi province). The nickel materials will be used for Tesla's lithium batteries," Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said in a virtual discussion.

Indonesia, one of the world's largest nickel producers, is seeking a leading role in EV battery industries. The country has been wooing Tesla to invest in the nickel industry and supply of EV batteries in Indonesia.

As of January 2020, Indonesia had 72 million tons of nickel ore reserves, according to data from the Ministry of Energy and Mineral Resources.

That accounted for 52 percent of the total amount of nickel ore around the world. The country's nickel production reached 2.47 million tons in 2021.

Pandjaitan said the Indonesian government would keep approaching Tesla, hoping the company would establish an EV manufacturer in the country.

"We're still in an ongoing negotiation with Tesla," he said.