Coordinating Minister Luhut Says Indonesia Will Supply 50 Percent Of World Nickel Needs In 2025

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. (Photo: Doc. Antara)

JAKARTA - Indonesia has become one of the largest nickel producers in the world in the form of Nickel Pig Iron (NPI), this is evidenced by the total production of 21 million tons per year. Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan said that this potential gave Indonesia a great bargaining position.

Therefore, the Indonesian government has now encouraged investment in downstream nickel derivative products to produce electric batteries.

"With this (nickel potential) we can see that Indonesia has a strong bargaining position", he said in his official statement, quoted on Friday, June 18.

Because of this great potential, Luhut said that Indonesia has the right to develop and work together that is mutually beneficial.

"We also can't be too kind. We have to play our part", he said.

In 2025, said Luhut, Indonesia is projected to supply 50 percent of the world's supply, compared to 28 percent in 2020. According to him, Indonesia's nickel production will increase with the presence of a High-Pressure Acid Leaching (HPAL) smelter which will start operating in 2021 and produce Mix Hydroxide Precipitate (MHP).

Therefore, Luhut said that the government is currently focusing on five things, namely downstreaming of Natural Resources (SDA), lithium battery development, health sector, maritime connectivity infrastructure, and reducing carbon emissions.

In addition to nickel, Luhut also mentioned the investment in bauxite downstream. He also briefly mentioned several industrial areas that develop nickel and bauxite derivative products. The seven areas include the Galang Batang area with a total investment value of USD 2.5 billion (operational target in 2021).

North Morowali industrial area with a total investment value of USD 4.19 billion (operational target in the fourth quarter of 2021), and the Tanah Kuning industrial area with a total investment value to be disbursed in stages of USD 60 billion (operation target in 2022).

In addition to these areas, Luhut also mentioned the investment value in Indonesia Morowali Industrial Park (IMIP) and Indonesia Weda Bay Industrial Park, each of which is 10 billion dollars. By building an integrated industrial area, according to him, production costs will become cheaper.

"In the end, our costs are very cheap, automatically the selling price of our processed nickel will be competitive, so China applies a dumping policy to Indonesia", he said.