Indonesia mulls curbs on new nickel smelters

Indonesia is considering imposing a moratorium on new nickel smelters to address a global supply glut and protect local industries, according to analysts. The proposed ban, discussed in state news agency Antara, aims to curb overproduction and stabilize commodity prices, reported the outlet. Energy and mineral resources minister Bahlil Lahadalia emphasized the move as part of efforts to bolster the country's industrial structure.

Semi-finished nickel products, such as nickel pig iron and nickel matte, constitute around 50 to 60 percent of Indonesia's total output, Antara cited. Nickel pig iron is primarily utilized in stainless steel production, while nickel matte finds application in electric vehicle batteries. Notably, Chinese investment comprises approximately 75 percent of Indonesia's nickel refining industry, as estimated by the US-based Centre for Advanced Defense Studies.

Indonesia maintains a significant share of the global nickel market, holding over half in 2023, according to a study by Rafi Adis Subarna, an analyst with Jakarta-based political risk consultancy KRA Group. The country's six-year ban on raw nickel ore exports has fostered the expansion of domestic mining and production, argued Subarna, citing robust global demand for electric vehicle batteries and increased investment in smelting facilities.