According to the 2024 U.S. Geological Survey report, the world’s nickel resources are estimated to exceed 350 million tons, with global mine production projected to increase from 3.27 million tons in 2022 to 3.6 million tons in 2023. This reinforces the notion that nickel is becoming one of the most strategic metal commodities amid the global shift towards a more environmentally sustainable economy. This shift is also driven by rising demand for nickel, a key component in battery production and stainless steel manufacturing, which continues to grow with the rapid advancement of electric vehicle (EV) technologies and renewable energy sources.
Indonesia plays a central role in the global nickel industry, ranking first in terms of production volume. In 2023, Indonesia is expected to produce approximately 516,700 tons of nickel annually, solidifying its position as a dominant player in the global supply chain. This output is largely produced by Ningbo Ligend Mining Co., Ltd., a subsidiary of the Tsingshan Holding Group, which operates an open-pit mine located in the Maluku Province, one of the richest regions in terms of mineral resources in Indonesia.
Indonesia’s strength in the nickel industry is not only defined by its production volume. Of the top 10 nickel-producing countries, Indonesia holds five positions, underscoring its dominance in the global market. The remaining spots are occupied by Russia, the Philippines, Colombia, and Madagascar, none of which can match Indonesia’s rapidly increasing output year after year.
A key factor behind Indonesia’s leadership in global nickel production is the government’s proactive policies in managing its natural resources. One such policy is Law No. 3 of 2020 on Mineral and Coal Mining, which aims to drive industrial down streaming by requiring mining companies to increase the value-added of their products through the construction of smelters and processing facilities. This policy not only boosts national export revenues but also strengthens Indonesia’s position as a leader in the global battery supply chain.
In addition to the issuance of Law No. 3 of 2020, the Indonesian government has actively pursued international partnerships for the development of the EV battery industry with global companies such as LG and CATL. This is a strategic move to position Indonesia as a global hub for electric battery production. These investments align with the government’s commitment to reducing carbon emissions through the adoption of electric vehicles, which will play a critical role in the global clean energy transition.
The outlook for Indonesia’s nickel industry is highly promising. As global demand for electric vehicles and battery technologies continues to rise, Indonesia is projected to remain a key player in the global nickel supply chain. Collaboration between multinational mining companies and the Indonesian government will be pivotal in ensuring that the country’s abundant nickel reserves are managed sustainably and provide long-term economic benefits.
With Indonesia’s dominance in nickel production, investment opportunities in this sector are becoming increasingly attractive to global investors looking to capitalize on the potential of the nickel market in supporting the clean energy transition and future technological advancements.
If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.
Author:
Dewi Susanti