U.S. Government policies under Donald J. Trump − in particular the Inflation Reduction Act (IRA) − and his inward looking leadership style could impact the global nickel industry, including Indonesia, an industry player has warned.

"IRA provides incentives in the form of a 25 percent tax cut for electric vehicle (EV) users, on the condition that the EV is assembled in North America and uses raw materials from partner countries, such as South Korea and Japan," Vice President for Communication at Nickel processing company Trinitan Green Energy Metal (TGEM), Bimo Prakoso, spoke with Indonesia Business Post on February 18, 2025.

The Inflation Reduction Act of 2022, a United States federal law which aims to reduce the federal government budget deficit, lower prescription drug prices, and invest in domestic energy production while promoting clean energy, is believed to limit the supply of critical minerals from countries considered Foreign Entities of Concern, such as China and Russia.

This policy, Bimo continued, effectively closes China and Russia's access to the U.S. electric vehicle market. It also serves as a warning for Indonesia, which is still dependent on Chinese investment in the nickel mining sector.

"We have reminded that Indonesia must move quickly. If we only focus on China, then access to the American market will be difficult," he said.

Bimo said that his company had tried to find a gap so that Indonesia could still participate in the US nickel supply chain. One option is through companies based in other countries, such as Singapore, so that they can still enter the American market without being hampered by the IRA policy.

Impact of Trump's policy

The change of government in the U.S. is adding to the uncertainty. Donald Trump's election victory could have major implications for the electric vehicle and nickel industries.

"Biden, with his IRA and clean energy policies, supports the growth of the EV market, while Trump is more inclined towards fossil fuels, such as coal," Bimo cited.

As Trump is now in power, the EV industry will likely experience a slowdown, which will impact the demand for nickel as the main raw material for electric vehicle batteries.

"Currently, sentiment towards nickel is still negative globally. This uncertainty has made many industry players still waiting for the direction of the next U.S.policy," he said.

TGEM began commercial operation of its facility in Bogor, West Java, in September 2023 and has completed its first shipment of Mixed Hydroxide Precipitate (MHP), a key raw material in the manufacture of electric vehicle batteries, to South Korea.

This nickel processing uses Step Temperature Acid Leach (STAL) technology, which is claimed to be able to meet the stringent standards of the Western market.

The MHP produced by TGEM has a nickel content of more than 50 percent, much higher than the global average of around 30-40 percent. This positions TGEM as a key player in the global nickel supply chain, particularly for overseas markets that prioritize environmentally responsible raw material sourcing.