Indonesia's energy and mineral resources ministry announced on Monday its commitment to enhancing the value-added production of nickel through downstream processing. Minister Arifin Tasrif indicated that the government is assessing current projects and may close low-value operations, particularly those producing nickel pig iron (NPI), to focus on more valuable production aimed at the new energy sector.
The ministry highlighted the substantial investment potential within the electric vehicle (EV) battery market, projecting that Indonesia's battery demand could reach 108.2 gigawatt-hours by 2030. To meet its goal of 20 million four-wheeled electric vehicles, the country will require a battery capacity of 780 GWh. Currently, domestic smelters can only produce raw materials equivalent to 373 GWh, leaving an investment opportunity of 407 GWh in the EV battery sector.
Minister Arifin emphasized the need for better control over downstream activities to ensure improved value-added prospects, workforce preparation, and support for the energy transition to the EV industry. Indonesia boasts 17 billion tonnes of nickel resources, with 5 billion tonnes in reserves, and the production quota for 2024 is set at approximately 240 million tonnes, following a demand of 220 million tonnes in the previous year.
Additionally, the ministry's geological agency recently reported the discovery of at least 100 unexplored sites in Indonesia that may contain nickel reserves. These sites, located from northern Sumatra to Papua, require further exploration to determine their mining potential. Agency chief Muhammad Wafid stated that utilizing these nickel resources will ensure a steady supply for newly established smelters, preventing them from operating for only a few years before ore depletion.
On July 30, Indonesian investment minister Bahlil Lahadalia noted that the country's nickel downstream policy has significantly boosted the export value of nickel products, reaching $33.5 billion in 2023, a tenfold increase.
