Where is the Indonesian Ni industry going?

On the 7-8th August 2025, “The 4th Nickel Producers, Processors, and Buyers Conference” was undertaken in Jakarta, Indonesia. About 250 people attended each day’s events which was held in English, organized by Petromindo.com and supported by others. Ben Lawson and Mrs Angela Durant undertook the moderator roles.

Overall, the nickel industry is a glowing example of the governments successful strategy to add value to it’s mining industry. It would seem that each successive government seeks to build on this success. However, this imposes more difficulty, and increased operational costs and complexities that industry finds burdensome. The recent decline in nickel prices and increased compliance burden may lead to some retraction within the industry. Hence, much of these conference notes outline industry concerns, from which it is hoped to begin to build a more sustainable industry.

The following are personal notes takes from the conference. I apologize for any errors or omissions.

Day 1 keynote address was undertaken by Cecep M. Yasin from the Directorate Mineral Business Development [Dir Jen Mineral & Coal] on “Indonesia’s Nickel Priorities; Strategy for the next decade”. Cecep reminded us that the bulk of the nickel industry is the growing production and export of stainless steel & nickel pig iron (NPI), wherein nickel for batteries is much a smaller and more fragile component of the industry. The nickel industry follows the global downward trend in commodity prices. The government is looking at ways to optimize Indonesia’s nickel industry, through 1) restricting further growth in the smelter industry, 2) acknowledging some nickel smelters will cut back production, 3) urge companies to further advance the status of their ore resources to ore reserves, 4) the need to stimulate further exploration of nickel resources.

Day 2 keynote address was undertaken by Rizwan A. Ramdhan, Director of Downstream Industry for Mineral & Coal [Ministry of investment & Downstream Industry] on “Accelerating Indonesia’s Green Industrial Transformation – The success of nickel down streaming for EV battery production”. The down streaming of nickel is part of the national development target for all natural resources, including agriculture and fisheries. Rizwan provided various detailed figures for nickel production and value, to emphasize the success of down streaming of nickel. Some aspects of investment opportunities associated with downstream industry for green energy include batteries, solar, hydro and biofuel. The government provides some fiscal incentives & ease of doing business to support the transition industry in Indonesia. Discussion with Mr Rizwan indicated that industry is concerned over;

1.     Changes and difficulties in obtaining annual approvals for RKAB (mining work plan) in a timely manner has led to disruptions in supply of ore to smelters, and placing mines on stand by for 6 months or more.

2.     Permits are required from at least 3 main ministries, and numerous local government bodies for mining and processing to be undertaken. These government bodies are poorly coordinated, contributing to a frustrating permit process.

3.     Further growth in the regulatory compliance for the ESG sector is discouraging, wherein the industry is seeking greater work efficiencies to counter a decline in commodity prices.

The conference supported presentations for a number of key industry leaders emphasizing management, economics and operational aspects of the industry. Several panel discussions included key CEO’s, industry associations plus marketing & ESG executives. Some common points included.

·       Concern over the present oversupply of some Ni products and global downturn in commodity prices. Concern over the growing competitive non-nickel battery technology. Stainless steel is to continue its growth over the next 5 years.

·       Distress over the governments poor handling of the RKAB (work plan and budget) for miners. Also, great concerns for operators and future investors over Indonesia’s numerous and sudden changes to the mining law and implementing regulations.

·       Concern over the limited defined reserves and resources of saprolite (7-8 years).

·       Indonesia needs to better manage its natural resources. Example was given of Indonesia that use to export oil but now imports, logging use to export timber but now imports. Indonesia has started to import nickel ore from Philippines.

·       Indonesia is the largest global supply of nickel, wherein some Indonesian influence over nickel prices is encouraged. Present price strongly focuses on Ni content, with little influence of heat adsorption and slag producing elements of Si & Mg. The government is aware of concerns over Ni price structure.

·       Indonesian smelters import Sulphuric Acid, chromium, and magnesium for the production of stainless steel. Increase in these costs is presently partially off set by lower nickel ore prices. There are many grades and uses for stainless steel.

·       Concern to strengthen the industries resilience through diversifying from China as the principal investor and off-taker of nickel.

·       There are 400 IUP OP for nickel, but only 8 in the exploration phase. Concern that more exploration is needed to ensure longevity for the nickel mining & smelting industry.

·       The definition of “green nickel” is in debate. It appears the concept of “green nickel” is losing interest, as there are not enough buyers willing to pay a higher price for such products.

·       Industry encourages government to hold open constructive dialogs on the development of the industry and evolution of regulations.

·       ESG regulations are so expansive it is practically impossible for companies to measure, monitor and comply with all such regulations. Companies tend to prioritize selective ESG aspects that may have a real impact on them. The government is working on a number of ESG standards for each mineral / rock commodity.

·       Sustainability standards for Indonesia commodities (coal, nickel etc) can be different to various international sustainability standards sought by some off-takers. Sustainability linked to recycling metals seems yet to be optimally implemented in Indonesia.

·       Implementation for National Nett Zero goals for 2050 seem to be often updated, as necessitated to comply with short term development goals. PLN’s outlook is “Our job today is to provide the electricity. Our job tomorrow is to care for the environment”. Indonesia may aim for the “best”, but be satisfied with what can be done well. What can realistically be done may depend in part on the unknown factor of innovation. For example- some mines are reviewing options / viability to replace some in pit hauling with electric trollies.

·       Human resources need to continue to employ local labour, while other factors trend towards automation. Going forward, the job skills for automation will call upon different training & skills.

·       The patterns of energy consumption by the mining & smelting industry may consider lower CO2 emissions, however it is broadly acknowledged that coal will continue to be the primary energy source for the next 20 – 25 years.

·       Hydropower is an attractive alternative for industry, though development of further hydro energy projects is expensive, has a high environmental impact and takes much time to develop. Solar energy is seen as a “supporting” energy source.

·       Industry is keeping an eye on the international competition between USA, EU and China for markets and investors.

·       Cargo superintending companies can reduce risk in marketing through providing independent assessments based on traceability, transparency and trust.

·       Industry would like to see more consistency & greater fairness in the market determination of nickel price as sought in Indonesia and in China.

·       The domestic & international Finance & Banking sectors now see mining as a desirable industry for their business. The global merger & acquisition industry has slowed, though mining is seen as a prospective industry. To build a new nickel smelter will take much time as it requires at least 3 ministries approval, whereas an existing smelter is a more attractive target for investors.

·       The Indonesian rupiah is seen to be relatively stable, as it is backed by various financial bodies. The concern is that if Trumps new fiscal policies may create devaluation pressure on the US dollar.