Australia is seeking to include critical mineral cooperation - particularly with regard to lithium - in the upcoming review of its trade agreement with Indonesia, according to its diplomatic representative.

Indonesia and Australia currently maintain a Comprehensive Economic Partnership Agreement (CEPA), which removes tariffs on most traded goods and provides legal and regulatory certainty for investors.

The CEPA came into effect in 2020. During a visit to Jakarta by Australian Prime Minister Anthony Albanese in May, both countries agreed to review the agreement in 2025 to consider possible amendments.

Australian Ambassador to Indonesia, Rod Brazier, stated recently that the Australian Government would assess options for cooperation on critical minerals.

This includes the possibility of Australia, a major global producer of lithium, supplying the material to Indonesia, which is developing its battery manufacturing sector.

"We are hoping that the [CEPA] review will examine issues such as the green energy transition and critical minerals. Indonesia requires many of the critical minerals that Australia has. Lithium is one example," Brazier said.

"We want to do more to be a consistent supplier of lithium to Indonesia's battery industry," he further added.

Lithium is a primary component in electric vehicle (EV) batteries, including those using lithium ferro-phosphate (LFP) chemistry.

According to the 2025 Geological Survey report, Australia mined an estimated 88,000 metric tons of lithium in 2024.

Indonesia does not produce lithium but has the world's largest reserves of nickel, another essential input in EV battery production.

Earlier in the year, Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that Australia had already supplied up to 80,000 tons of lithium to the Morowali Industrial Park.

He also confirmed that discussions were ongoing to include critical mineral cooperation within the framework of the CEPA.

In 2023, the government of Western Australia - responsible for around half of global lithium output - signed a plan of action with the Indonesian Chamber of Commerce and Industry (Kadin) focused on investment in critical minerals.

Indonesia has permitted foreign investment in its battery supply chain as part of its industrial development strategy. In July, construction began on an EV battery manufacturing facility in Karawang backed by Chinese investment, with an estimated value of US$ 5.9 billion.

The Indonesian Government has stated its intention to position the country as a regional EV battery production centre.

According to data from Indonesia's Ministry of Trade, the country has run a trade deficit with Australia in recent years. This deficit narrowed in 2024, from nearly US$ 6.1 billion in 2023 to around US$ 5.5 billion.

Bilateral trade in 2024 was reported at nearly US$ 15.4 billion. The Central Statistics Agency (BPS) reported that Australia was the third-largest contributor to Indonesia's trade deficit between January and May 2024, with an imbalance of approximately US$ 2.11 billion.

Commenting on this trend, Brazier noted that the CEPA had removed tariffs on goods traded between the two countries. He also pointed out that the official data did not include trade in services such as tourism.

According to information provided by the Australian embassy, total bilateral trade in goods and services increased from US$ 11.6 billion in 2019 to US$ 23.2 billion in 2024.

Indonesia recorded a surplus of approximately US$ 2 billion in 2024, partly attributed to increased tourism from Australia, particularly to Bali.