Wyloo (formerly known as Wyloo Metals) is the latest nickel producer to raise concerns over the Inflation Reduction Act (IRA), a US federal law that is considered to be the largest climate investment in US history.
The legislation encourages innovation by giving firms various demand- and supply-side incentives to invest in developing and deploying clean energy technologies, while helping the country transition to net zero.
Wyloo’s concerns include the US Government possibly allowing its big Indonesian rivals access to the legislation’s incentives as early as next month.
Wyloo chief executive officer (CEO) Luca Giacovazzi told the Australian Financial Review (AFR) that any agreement that makes Indonesian nickel companies eligible for IRA funding may make it difficult to justify Australian and Canadian investment due to higher production costs.
“If the world wants batteries and EVs (electric vehicles) to be both affordable and environmentally sustainable, investment in Australian and Canadian production must be encouraged,” Giacovazzi told AFR.
“A free-trade agreement on nickel with Indonesia would significantly reduce the attractiveness of investing in countries with higher ESG (environmental, social and governance) standards and leave consumers with no choice but to use dirty nickel.”
Chalice Mining CEO Alex Dorsch expressed similar concerns in August, suggesting Indonesia’s nickel-related environmental issues were known to the battery minerals supply chain, including EV manufacturers.
“The North American players and European carmakers are probably the most averse to (Indonesia’s environmental issues) at the moment, but they have a dilemma in that if they don’t utilise Indonesian nickel, there is really nowhere near enough for them to create an EV industry,” he told AFR.
As of October 2023, nickel is not included in the Australian Government’s critical minerals list.
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