Aussie nickel companies under pressure from US subsidies

Five Second Summary:

Australian nickel companies like Andrew Forrest’s Wyloo Metals and Chalice Mining, are worried that US subsidies for Indonesian rivals under the Inflation Reduction Act could hurt their businesses.

The companies:

• Wyloo Metals

• Chalice Mining

• BHP

• Ford

• GM

• Contemporary Amperex Technology

What's happening:

• IRA subsidies could apply to Indonesian companies

• Australian nickel companies argue ESG standards are lower in Indonesia than Australia

• Chalice Mining and BHP share concerns about local production impacts if Indonesian groups gain access to US subsidies meant to accelerate the energy transition.

Numbers + facts:

• The Inflation Reduction Act provides incentives for electric vehicle production but mandates the use of materials from the US or specific agreement countries.

• Indonesia holds the largest nickel reserves globally, with Chinese financing heavily influencing its industry.

• On a US trip, Australian Prime Minister Anthony Albanese recently announced a doubling of critical minerals subsidies to $4 billion, excluding nickel from the list of critical minerals despite its role in batteries.

• The US has had nickel as a critical mineral since 2020

Looking ahead:

• The concerns raised by Australian nickel producers underscore the potential global impact of US subsidies on the competitive landscape, reflecting broader anxieties about fair competition and environmental standards.

• The critical minerals space will continue to be inherently politically charged, requiring governments and companies to work together

• The "foreign entity of concern" provision in the IRA remains ambiguous, especially considering that Indonesian nickel production is often linked to Chinese companies.

Read more: Australia and Indonesia via for nickel subsidies (via AFR)