Jakarta, Indonesia Sentinel — Indonesia nickel production is poised to solidify its role as a global leader, with predictions indicating the country could control 75% of the world’s nickel demand within the next three years.
According to Septian Hario Seto, Deputy for Investment and Mining at the Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves), Indonesia accounted for 59% of global nickel demand in 2023. That figure is projected to increase to 70% by the end of 2024.
“Last year, we produced around 59% of the world’s nickel demand. This year, we expect that number to rise to between 65% and 70%,” Seto told CNBC Indonesia’s Mining Zone on Thursday, October 17, 2024.
Looking ahead, Indonesia’s share in global nickel production could reach 75%, positioning the country to exert significant influence over global nickel prices. “We are already capable of controlling global nickel prices.
However, with our contribution reaching 70%, we have a responsibility. We can’t arbitrarily drive prices higher or intentionally disrupt competition,” Seto stated.
As Indonesia approaches this level of control, Seto emphasized the importance of maintaining strong diplomatic ties with major nickel consumers such as the United States, the European Union, China, Japan, and South Korea. “These countries are the largest consumers of nickel,” Seto added.
The surge in Indonesia’s nickel production is reflected in official figures. The Ministry of Energy and Mineral Resources reported that in 2023, Indonesia’s nickel ore production reached 175.6 million tons, with the country’s total nickel resources estimated at 18.5 billion tons.
Additionally, Indonesia nickel reserves were recorded at 5.3 billion tons for ore and 56.1 million tons for nickel metal.
This production growth is largely attributed to President Joko Widodo’s push for downstreaming, a strategy that has significantly boosted the value of Indonesia’s nickel exports. In 2024, downstreamed nickel exports skyrocketed to IDR 500 trillion (around USD 32 billion), a sharp increase from the pre-downstreaming figure of IDR 30 trillion in 2017-2018.
President Jokowi highlighted that the rise in nickel exports not only benefits companies but also contributes to the country’s fiscal revenue through corporate taxes, employee income taxes, and non-tax state revenues (PNBP).
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“The profits aren’t just for the companies. With this surge, we collect corporate taxes, employee taxes, royalties, export fees, and PNBP,” Jokowi noted.
Indonesia’s booming nickel industry, driven by a focus on value-added production, is expected to continue playing a critical role in the global supply chain, particularly as demand for electric vehicle batteries and renewable energy technologies increases.
(Becky)
