Indonesian President Joko Widodo said strategic cooperation with Australia on electric vehicle batteries was a priority after talks with his Australian counterpart in Sydney on Tuesday.

Widodo and Australian Prime Minister Anthony Albanese spoke to reporters after an annual leaders meeting, where a green economy and regional security were discussed.

Widodo, who is in his second and final term in office, wants to build an electric vehicle battery production industry in Indonesia, which has the world's largest nickel reserves.

The EV industry uses the metal extensively.

Widodo has said in interviews that he is seeking cooperation from Australia, a major supplier of key battery component lithium.

"Indonesia and Australia must build a more substantive and strategic economic cooperation through the joint production of EV batteries," Widodo told reporters after the leaders met.

Widodo told business leaders that Indonesia had high potential as an investment destination, and that the Southeast Asian nation had a target to produce 1 million electric cars and 3.2 million electric motorbikes by 2035.

Indonesia's Chamber of Commerce and Industry (KADIN) signed an "action plan" with the state of Western Australia on critical mineral supply chain and worker skills, Indonesia's Ministry of Economic Affairs said.

Meanwhile, Albanese announced a A$50 million ($33 million) initiative to attract private climate finance to Indonesia, and said Export Finance Australia would establish a $200 million capital financing facility with PT Perusahaan Listrik Negara (PLN) to support Indonesia's energy transition.

Indonesia is Australia's 13th largest trading partner, and Australian investment in Indonesia totalled A$4.3 billion ($2.87 billion) in 2021, with coal the top export, government data shows.

Two-way trade was worth A$23.3 billion, Albanese said.

The meeting between the leaders was held at the harbourside Taronga Zoo, part of a regional conservation programme for Sumatran Tigers.

Australia would make visa changes to make business travel easier for visiting Indonesians, Foreign Minister Penny Wong told ABC radio earlier on Tuesday.

On AUKUS, Wong said Australia would be transparent as it discusses the plan to acquire nuclear-powered submarines in the next decade through the defence partnership with the U.S. and Britain.

Indonesia has previously expressed concerns about the ramifications of AUKUS.

Indonesia is "keen to ensure nuclear material is not allowed to proliferate ... We both want a peaceful and stable region," Wong said.

Widodo will travel to Papua New Guinea on Wednesday. ($1 = 1.5035 Australian dollars) (Reporting by Kirsty Needham in Sydney and Fransiska Nangoy and Ananda Teresia in Jakarta; Editing by Himani Sarkar)