Indonesia to limit construction of nickel smelters: Investment Minister

Nickle ore processing in a factory in Indonesia. (Photo: thejakartapost.com)

Jakarta (VNA) – Indonesia will limit the construction of nickel smelters to ensure new plants to produce high-value products and follow green principles in the production process, Minister of Investment Bahlil Lahadalia said on January 13.

Noting many existing smelters already produce nickel pig iron or ferronickel, the minister said that Indonesia needs to prioritise using ore reserves to create higher value materials, including input for batteries for electric vehicles.

Nickel pig iron and ferronickel typically contain up to 40% of nickel.

As of 2021, Southeast Asia's biggest economy had 15 nickel smelters, according to a government official.

In early 2020, Indonesia banned the export of unprocessed nickel ore to promote the local nickel smelting industry.

The government has said that the export value of processed nickel products last year was estimated at 30 billion USD, 10 times higher than the export value of nickel four years ago.

Smelters in Indonesia often use coal as a source of energy. New smelters should be powered by green energy, the minister said without giving further details.

Previously, a senior official at the country’s energy ministry said that Indonesia's high-grade nickel ore reserve will only last less than two decades if there are no restrictions on smelter construction./.