Hyundai Motor and PT Adaro End Aluminium Supply Agreement Amid Climate Concerns

Hyundai Motor and PT Adaro End Aluminium Supply Agreement Amid Climate Concerns. Hyundai Motor ends Indonesia aluminium deal after climate campaign by K-pop fans.

Hyundai Motor and PT Adaro End Aluminium Supply Agreement

Hyundai Motor Co and PT Adaro Minerals Indonesia Tbk have terminated an aluminium supply agreement following pressure from a climate campaigner supported by K-pop fans, urging companies not to source metal produced using coal power.

Millions of young K-pop fans have rallied behind various global campaigns and social causes, often leveraging social media platforms.

Hyundai Motor announced on Tuesday that it had concluded its non-binding memorandum of understanding (MoU) with Adaro at the end of 2023. The decision was made jointly to explore other opportunities independently.

Wito Krisnahadi, director of PT Adaro Minerals Indonesia, confirmed that the companies chose not to renew the agreement after its expiration.

The South Korean automaker had signed the MoU with Adaro Minerals in 2022 to secure the right to purchase aluminium produced by Adaro’s subsidiary PT Kalimantan Aluminium Industry.

At the time of signing, Hyundai aimed to procure aluminium from Adaro in line with its carbon neutralization policy, responding to increasing demand for aluminium among global automakers.

Aluminium smelting requires significant energy, and when powered by coal, it results in substantial carbon emissions.

Adaro intends to power the third phase of its aluminium smelter project with a hydropower plant currently under construction by its group.

The climate activist group Kpop4Planet, advocating for an end to Hyundai‘s aluminium agreement, hailed the decision by the carmaker as a victory.

“It is the victory of thousands of K-pop fans who genuinely care about the climate crisis, especially in Indonesia,” Kpop4Planet told Reuters, expressing intent to continue monitoring Hyundai’s sourcing of materials for its manufacturing.