Indonesia’s energy and mineral resources ministry announced Monday it continues to encourage industry to increase added value through nickel downstream, Kallanish reports.

Minister Arifin Tasrif said the government is evaluating existing projects and may shut down low-value-added ones, such as those producing nickel pig irons (NPIs). The aim is to pursue more value-added production targeting the new energy industry.

According to the ministry, there is still huge investment potential in the electric vehicle battery sector.

“The need for batteries in Indonesia until 2030 is projected to reach 108.2 gigawatt-hours. To achieve the target of 20 million four-wheeled EV vehicles, a battery capacity of 780 GWh is needed,” the ministry says in a statement. “Currently, the domestic smelter capacity is only able to produce raw materials equivalent to 373 GWh, so there is still an investment opportunity of 407 GWh in the EV battery sector.”

“We must really control this so that the downstream has better value-added prospects, can prepare a better workforce, and can also support our energy transition program to the EV industry,” adds Arifin.

Indonesia claims to have 17 billion tonnes of nickel resources, with 5 billion t of reserves. The current nickel production quota for 2024 is around 240 million t. Last year, smelter demand was 220m t.

Recently, the ministry’s geological agency reportedly announced at least 100 additional sites in Indonesia potentially containing nickel reserves remain unexplored. Kallanish has contacted the ministry for comments.

According to the media reports, the government is expected to follow up on the discovery made during preliminary surveys. The sites are scattered from the northern end of Sumatra to the Papua region. Further exploration is needed to find the exact points for mining.

“The exploitation of the potential nickel resources found by the Geological Agency could also ensure constant nickel supply for newly opened nickel smelters so they can continue operating to benefit the nation,” agency’s chief Muhammad Wafid was quoted as saying. “We should not let smelters run for only several years before the nickel ore is depleted. We should be responsible for processing the nickel as we have restricted nickel ore export.”

On 30 July, Indonesian minister of investment Bahlil Lahadalia stated that the country’s nickel downstream policy helped boost the export value of nickel products tenfold to $33.5 billion in 2023.