Indonesia, which is the world’s biggest nickel producer, has floated the idea of joining with other resource-rich countries to make an OPEC-style producers cartel, an arrangement that would try to shift the power to mineral suppliers.
Indonesia has also approached the United States in recent months seeking a deal similar to that of Japan and the European Union. Biden administration officials are weighing whether to give Indonesia some kind of preferential access, either through an independent deal or as part of a trade framework the United States is negotiating in the Indo-Pacific.
But some U.S. officials have warned that Indonesia’s lagging environmental and labor standards could allow materials into the United States that undercut the country’s nascent mines, as well as its values. Such a deal is also likely to trigger stiff opposition in Congress, where some lawmakers criticized the Biden administration’s deal with Japan.
Jake Sullivan, the national security adviser, hinted at these trade-offs in a speech last month, saying that carrying out negotiations with critical mineral-producing states would be necessary, but would raise “hard questions” about labor practices in those countries and America’s broader environmental goals.
Whether America’s new agreements would take the shape of a critical minerals club, a fuller negotiation or something else was unclear, Mr. Sullivan said: “We are now in the thick of trying to figure that out.”