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Indonesia's Nickel Reserves are Sufficient for Expansion.
WINDONESIA May 10, 2024
A worker holds nickel ore at the nickel mining factory of PT Vale near Sorowako, East Luwu, South Sulawesi on Jan. 8, 2014. (REUTERS/Yusuf Ahmad/File Photo)
Investment Ministry's Downstream Strategic Investment Director Mohamad Faizal stated on May 8, 2024 that Indonesia's high-grade nickel reserves will last until 2035, while low-grade nickel supplies will suffice at least until 2069.
"This indicates the potential for further expansion in stainless steel mills and high-pressure acid leach plants," Faizal told conference participants hosted by Mysteel consultants, referring to battery material extraction.
He added that the reserves are also enough to place Indonesia among the top five electric vehicle (EV) battery producers and the top two stainless steel manufacturers by 2040. The first EV battery plant in Southeast Asia will complete construction in 2024.
Faizal added that smelters could continue to be built if they produce different types of products.
The Indonesian government banned nickel ore exports in 2020 to promote domestic value addition, leading to massive investments in producing nickel pig iron (NPI) and materials for EV batteries.
Indonesia's high-grade nickel ore, which contains 1.7 percent nickel, is primarily used to produce nickel pig iron (NPI), a raw material for stainless steel. Meanwhile, electric vehicle batteries use lower-grade nickel.
Previously, Indonesia was blamed for a 45 percent drop in nickel prices last year due to oversupply, which pressured producers in Australia and other countries.
The Indonesian Nickel Miners Association (APNI) Secretary-General Meidy Katrin Lengkey said the APNI has urged the government to impose a moratorium on new pyrometallurgical plants to extend the life of high-grade reserves.
High-quality ore reserves in Indonesia may run out in about six years, according to APNI warnings last year.
"We need to stop it... But maybe we need to wait for the new government," she said. Meidy also added that domestic processing ore consumption would increase by 34 percent this year.
A senior official from the campaign of President-elect Prabowo Subianto said he had proposed a moratorium on new smelter construction to the incoming president. However, no decision has been made yet.
Indonesia could increase reserves by exploring new resources, although Lengley noted that their extraction is complicated by the fact that most of the mining potential is located in areas designated as forests.
Source: investor.id