The United States-led Mineral Security Partnership (MSP) aims to accelerate investment in responsible mineral supply chains, but its approach is prompting discussion with key producing nations like Indonesia. Launched in 2022, the MSP currently includes 14 countries and focuses on commodities vital for clean energy technologies and defense systems.
Main Focus of the Mineral Security Partnership
The MSP emphasizes clean technology practices throughout the mineral lifecycle – from mining and extraction to processing and recycling. Key commodities of focus include lithium, cobalt, nickel, manganese, graphite, rare earth elements, and copper. The initiative supports projects that meet global environmental standards, enhance local values, and improve livelihoods.
According to the International Energy Agency (IEA) Critical Minerals Market Review 2023, China currently dominates the processing of many critical minerals. China processes 65 percent of lithium, 43 percent of nickel, 42 percent of copper, 74 percent of cobalt, 90 percent of rare earth elements, and 100 percent of graphite. Indonesia is a significant nickel producer, accounting for 43 percent of global production.
Geopolitics and Collaboration with Indonesia
The MSP can be viewed as a rebalancing policy by the U.S. and other developed countries to influence producing nations. Environmental protection, community involvement, and control over market and technology are seen as geopolitical tools.
In mid-July 2024, U.S. Deputy Secretary of State for Economic Growth, Energy, and the Environment, Jose Fernandez, visited Indonesia to discuss critical minerals. Concerns raised included Indonesia’s environmental practices, local community involvement, and the presence of Chinese companies. Fernandez expressed the belief that collaboration with the MSP would bring beneficial investment to Indonesia, respecting labor laws and environmental regulations.
Indonesian Coordinating Minister for the Economy Airlangga Hartarto expressed hope for cooperation similar to that between the U.S. and Japan. Discussions focused on developing critical minerals and establishing a Mineral Forum as a supply chain platform.
Indonesia’s Position and Regulatory Framework
Indonesia possesses strong bargaining power due to its critical mineral resources. The country’s regulatory framework, including Law No. 32/2009 (Environmental Protection and Management) and Law No. 3/2020 (Mineral and Coal Mining), addresses environmental impact assessments, community involvement, good mining practices, and environmental protection. Indonesia is also a member of the Extractive Industries Transparency Initiative (EITI), promoting responsible mining and good governance.
President-elect Prabowo Subianto’s engagement with various countries, including China, Russia, and the U.S., signals a willingness to collaborate with diverse partners. The author, a former Senior Advisor to the Minister of Energy and Mineral Resources, emphasizes that a successful partnership requires equality, balance, and mutual respect.
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