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Mary says that they are not looking at the model in the way that they have proposed.

President of Indonesia and Mary Ng of Canada.
Joko Widodo, president of Indonesia, and Mary Ng, Canada's minister of trade. Ng said over the weekend Canada isn't looking to join a nickel alliance as has been proposed by Indonesia, the world's top producer of the metal critical to the production of electric vehicle batteries. Photo by Leon Neal /Pool via REUTERS

The Trudeau government wants to strengthen Canada's relationship with Indonesia but not so much that it will join the emerging Asian power that is trying to get off the ground.

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The idea that Indonesia has proposed to us is one that we are not looking at in the way that they have proposed.

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Indonesia is a country on the rise thanks to a wealthy population and its vast nickel deposits, a metal that is in high demand because it is central to the production of electric vehicles, which are crowding out cars and trucks powered by internal combustion engines as countries step up

Indonesia wants to be a main player in the EV battery industry, according to the president.

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The Saudi Arabia of battery metals is one of the strategies used by the government. Indonesia, the world's largest producer of nickel, took advantage of its role as host of this year's G20 summit to lobby other metal producers to join.

Analysts and industry people said that the nickel produced in Canada was more eco-friendly than that of Indonesia.

The use of nickel as a primary component of batteries requires extremely pure nickel. Analysts feel that Canada has an advantage that it could lose if it joins an alliance with an electric vehicle manufacturer.

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The demand for nickel is expected to increase by over 600 percent by the year 2030.

Vale SA signed an agreement to supply General GM with 25,000 metric ton of nickel sulfate annually from its proposed plant in Quebec.

Investment in Canada's nickel sector, as well as other critical minerals needed for EV, received a shot in the arm from the Inflation Reduction Act in the United States, which ties billions of dollars in tax credits for EV to requirements that their batteries besourced from North American materials.

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In 2020, Canada accounted for 6.7 per cent of global nickel production, which is a far cry from the 80 per cent it accounted for in the 1960's.

Indonesia accounted for 30.4 per cent of global supply, more than triple its nearest competitors, the Philippines and Russia. Australia is slightly ahead of Canada.

  1. The sun has set on the old Inco nickel stacks in Sudbury, Ont. as the industry transitions to a new method for processing the metal critical in electric vehicle batteries.
  2. General Motors assembly workers connect a battery pack underneath a partially assembled 2018 Chevrolet Bolt EV vehicle on the assembly line at Orion Assembly in Lake Orion, Michigan.
  3. Headquartered at the Pentagon in Arlington, Virginia, the U.S. Department of Defense is having discussions with miners about the important role northern Ontario’s Ring of Fire region will play in producing the critical minerals needed by Canada and the U.S.

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Canada was keen to work with Indonesia, which got a pledge to "negotiate and implement" a Comprehensive Economic Partnership Agreement with the country, in spite of the fact that they rejected Indonesia's idea.

Canada wants to work with Indonesia on a wide range of commercial opportunities, based on the common strengths of the two nations, and is very much at the negotiating table on a free-trade agreement.

The email address is nkarim@postmedia.

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