Australia and Indonesia concluded their ninth foreign and defence ministers’ meeting in Canberra on 28 August, resulting in agreements in strategic sectors, especially critical minerals. The meeting capped off what has been a year of intensifying engagement: Australian Prime Minister Anthony Albanese’s May visit ^[1] to Jakarta, Indonesian Minister of Law and Correction Affairs Yusril Ihza Mahendra’s June visit ^[2] to Canberra, and Australian Minister of Small Business Anne Aly’s August trip ^[3] to Jakarta.

On the surface, these exchanges reflect a blooming relationship. But the test for Australia is not the number visits or joint statements, but whether sustained and tangible cooperation can provide mutual benefits and be delivered in areas that resonate with Indonesia’s priorities.

For Jakarta, the partnership matters most in Indonesian President Prabowo Subianto’s economic agenda ^[4], particularly in minerals and industrialisation. Australia should temper any expectation that Indonesia will view its relationship with Canberra as exceptional compared to other bilateral ties. As an emerging power, Indonesia is committed to its foreign policy of ‘pragmatic equidistance ^[5]’—aspiring to secure as many benefits as possible from various partners while avoiding dependence on any single power bloc.

Since the early 2020s, Indonesia has pursued ^[6] a national strategy of mineral-based industrialisation. Nickel processing has been central to this strategy, with Jakarta envisioning a future where raw materials are converted into high-value products such as batteries for electric vehicles ^[7] (EV). The policy is designed not just to boost GDP, but also position Indonesia as a pivotal actor in the global mineral supply chain, enhancing its claim to middle-power status.

Indonesia has used its ‘free and active’ doctrine of pragmatic engagement to attract investments in the raw mineral sector. Between 2020 and 2024, Indonesia received ^[8] more than US$30 billion in direct investment for smelters and mineral processing projects, much of it from China’s Belt and Road Initiative. In 2024, a consortium led by South Korea’s LG Energy and China’s Huayou Cobalt committed ^[9] another US$9.8 billion to build Indonesia’s first EV battery cell plant.

Indeed, Australia also supports Indonesia’s ambition. The joint statement ^[10] from the ministers’ meeting underscored Australia’s support for Indonesia’s EV sector, including cooperation on battery manufacturing and critical industries. Australia also welcomed ^[10] the formation of the Association of Southeast Asian Nations’ Geoeconomics Task Force, a forum Jakarta hopes will safeguard regional autonomy in supply chain governance amid intensifying competition between the United States and China over critical minerals.

Furthermore, Indonesia has begun investing in critical minerals in Australia, making contributions in Australia’s economic interest. For example, Indonesia’s minister of energy and mineral resources, Bahlil Lahadalia announced a plan to import lithium ^[11] from Australia to support Jakarta’s EV battery ambitions. Such collaboration could form the backbone of a resilient and diversified regional supply chain for critical technologies, insulating both countries from overdependence on China.

Some Australian companies have also shown commitment to the relationship. Australia’s Nickel Industries invested ^[12] US$1.7 billion in high-pressure acid leach technology in the Indonesia Morowali Industrial Park, a move praised by Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto. Yet this figure pales in comparison to Chinese and South Korean capital flows. If Canberra wants to be taken seriously as a geoeconomic partner, it will need to scale up public and private investment.

Doing so would bring strategic dividends. For Indonesia, stronger Australian involvement would keep competition alive in its mineral sector, limiting overreliance on China. While Australia cannot match the sheer scale of Chinese investment, it can leverage its strengths by encouraging its companies to focus on enhancing mineral competitiveness—for example, through technology upgrades that improve efficiency, sustainability and processing capacity in Indonesia’s mining industry. For Australia, deeper engagement would also serve its own economic interests by boosting industrial productivity, potentially serving as a pathway for a higher value-add in its own mining sector.

Still, Australia must maintain realistic expectations. Due to its non-aligned foreign policy principle, Jakarta will not elevate Canberra to a privileged position in its foreign policy hierarchy. Prabowo’s government will continue to pursue diversified partnerships bilaterally and multilaterally, even some that may unsettle ^[13] Canberra, such as with China and Russia. Jakarta is unlikely to prioritise relations in favour of any single partner and has repeatedly demonstrated that economic benefit outweighs ideological alignment.

Indonesia is likely to continue working on engagement with various countries, including cultivating its relationship with Australia, so this blooming phase in bilateral ties can be expected to continue.

If Canberra wants the spring to last, it must translate rhetoric into economic commitments—especially in the critical minerals sector Jakarta sees as its future. Empty statements will not be enough; sustained investment, industrial collaboration and trust-building will be necessary. Only then can Australia anchor itself as a credible partner in Indonesia’s economic transformation and secure a meaningful role in Southeast Asia’s evolving geoeconomics.