Discovering Nickel Industry in Indonesia

by | May 12, 2022 | Uncategorized | 0 comments

Analysis on nickel industry in Indonesia

Source: Unsplash

The meeting of Elon Musk and the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan left many questions for the Indonesian. Fortunately, Septian Hario Seto as the Deputy for Investment and Mining of the Coordinating Ministry for Maritime Affairs and Fisheries gave a leak that Elon and Tesla’s response was quite good with the meeting and planned to send their team to Indonesia to see the potential for cooperation.

This middle ground is still being sought for Tesla’s cooperation. In several countries such as Germany and China, Tesla fully controls the company even though it is not located in the United States (US). Meanwhile, Hario also explained that in Indonesia, we must cooperate with local companies.

Tesla CEO Elon Musk is reportedly set to meet with Indonesian President Joko Widodo as early as this week to discuss electric vehicle supply chain development in the Southeast Asian country. Tesla representatives traveled to Indonesia to discuss nickel production at a hub in the country, according to a report from Reuters. The reps, who have not traveled back to the United States yet, were confirmed to be in Indonesia to visit the nickel plant by Luhut Binsar Pandjaitan, the country’s Coordinating Minister of Investment and Maritime Affairs.


Nickel production in Indonesia is primarily conducted by Vale’s PT Vale Indonesia and Aneka Tambang, which combined employed 5,820 employees in 2017, not accounting for jobs related to processing and in metallurgical industries such as the 43,000 employees at Morowali Industrial Park. Indonesia is the largest nickel producer in the world, with 800,000 tonnes of nickel produced in 2019, up from 606,000 tonnes in 2018. In 2020, production is expected to drop due to the export ban.

The largest production sites for nickel are located in the provinces of South Sulawesi, Southeast Sulawesi, Central Sulawesi and North Maluku. Outside of the mentioned provinces, there are also nickel mines operating in Paser Regency (East Kalimantan), Raja Ampat Regency (West Papua) and in West Seram Regency (Maluku). Further reserves in Papua has also been explored.

The major driver for nickel growth is China being the world biggest stainless steel manufacturer, currently recovering following the pandemic. We expect stainless steel output from China to recover gradually after lockdowns have eased. The manufacturing Purchasing Manager’s Index (PMI) for China rose to 51.5 in September 2020 from below 50 earlier in the year, signaling that China is on the trend of recovery postCOVID-19, while the rest of the world is struggling to overcome economic contractions. We also anticipate that the second wave of lockdowns in some countries will heighten uncertainty for the global demand for nickel. Analyst consensus expects the stainless steel market to take at least two years to recover to the pre-COVID-19 level. On this basis, we project that the global primary nickel supply will not be fully absorbed, resulting in a surplus and the forecasted nickel price of USD 12,000 – USD 14,000/MT in 2020-2021. Nickel price prevailed around USD15,000/MT as of October 2020, up from USD11,000/MT in March 2020.

Here are the five largest nickel mines by production in Indonesia, according to GlobalData’s mining database.

1. Sorowako Mine

The Sorowako Mine is a surface mine located in South Sulawesi. It is owned by Vale and produced an estimated 71.6 Thousand tonnes of nickel in 2020. The mine will operate until 2045.

2. Yiwan Mine

Located in South Kalimantan, the Yiwan Mine is owned by Yiwan Mining. The mine produced an estimated 42.994 Thousand tonnes of nickel in 2020.

3. Asera Project

The Asera Project is located in South East Sulawesi. It is owned by Solway Investment Group and produced an estimated 30.78 Thousand tonnes of nickel in 2020.

4. Gag Island Project

The Gag Island Project, owned by Indonesia Asahan Aluminium, is a surface mine located in West Papua. The mine produced an estimated 27.02 Thousand tonnes of nickel in 2020. The mine will operate until 2047.

5. Pomalaa Mine

Owned by Indonesia Asahan Aluminium, the Pomalaa Mine is a surface mine located in South East Sulawesi. It produced an estimated 26.352 Thousand tonnes of nickel in 2020.

Future Prospect

The majority of nickel supply in the future will come from more collaborations between Indonesian and Chinese companies on NPI and High Pressure Acid Leaching (HPAL) processing plants. PT Aneka Tambang (Persero) Tbk (ANTM, idA/Stable) and PT Vale Indonesia Tbk (INCO) will also take part in HPAL development projects. 

Tsingshan Holding Group is one of the first movers in the domestic refined nickel production sector. It has been aggressively investing in Indonesia since the first nickel regulation was issued in 2014. Supported by strong financial capacities and experience in stainless steel operations, the group has developed annual production capacities of three million tons of stainless steel and more than three million tons of NPI in Indonesia.

Bearing in mind the country’s nickel reserves, Indonesia is strategically positioned to become a major player in the global EV supply chain. However, Indonesia must invest in technology, talent resources, renewable energy and infrastructure to be part of the EV future of the region. The abundance of metals like nickel and cobalt on Indonesia’s islands could calm worries that the electric vehicle (EV) industry would confront resource bottlenecks in building millions of batteries.

BRIGHT Indonesia as Your Local Partner

With the constant shift of consumer behavior and demands, it would need a lot of in-depth research about the Indonesian nickel industry. Therefore, to enter the Indonesian market, you would need the right local partner to assist you. 

BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

  1. Assist you in expanding and developing your business by identification of potential partners through comprehensive market research regarding client’s request.
  2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arranging business meetings, and acting as a liaison.
  3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
  4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email

*This article is written by Nadia Syailendra


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