Bipartisan Senate Letter Opposes Potential IRA Critical Minerals Deal With Indonesia
A bipartisan group of nine senators sent a letter to the commerce and energy secretaries and the U.S. trade representative opposing a potential critical minerals deal between the U.S. and Indonesia.
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Citing recent reports of talks between the U.S. on a “limited free trade” agreement covering critical minerals (see 2309070075), the Oct. 24 letter said such a deal would “undermine the intent of Congress and undermine the jobs and futures of our workers.”
The letter was signed by Sens. Tina Smith, D-Minn., Kevin Cramer, R-N.D., John Fetterman, D-Pa., Tammy Baldwin, D-Wis., Joe Manchin, D-W.Va., Sherrod Brown, D-Ohio, Amy Klobuchar, D-Minn., Lisa Murkowski, R-Alaska, and Bill Cassidy, R-La.
Indonesia is a major producer of nickel. A critical minerals deal with Indonesia would allow batteries produced with Indonesian nickel to be used in vehicles qualifying for tax credits under the Inflation Reduction Act.
However, “expanding” Indonesian nickel operations “raise several concerns,” including weak labor protections, Chinese dominance of Indonesian mining and refining, biodiversity impacts, waste practices that impact ocean health, lack of community engagement and a significantly higher embedded carbon dioxide footprint over U.S., Australian or Canadian nickel production, the letter said.
On the other hand, domestic and allied nickel producers “have pledged and proven to operate under the highest environmental and workforce standards,” the letter said.
“Indonesian-sourced minerals are fully available to automakers, battery manufacturers, or other energy manufacturers in the U.S.,” the letter said. “However, given the extraordinary taxpayer resources at play, we strongly believe that eligibility for the critical minerals credit must prioritize domestic producers and existing free trade agreement partners. If expansion is deemed necessary, it should be directed toward countries with strong labor, human rights and environmental standards.”