Indonesia: High-grade nickel ore projected to get exhausted in next 6 years

The Indonesian Nickel Mining Association has signalled a potential depletion of high-grade nickel ore in the country within approximately six years. This anticipated scarcity is poised to significantly impact global stainless steel production, likely resulting in shortages and subsequent price escalation, according to a SteelDaily report.

High-grade nickel ore in Indonesia primarily facilitates the production of nickel pig iron (NPI), a key raw material in stainless steel manufacturing. Conversely, low-grade nickel ore is predominantly allocated for electric vehicle battery production.

The Secretary-General of the International Nickel Study Group (INSG) emphasised during a meeting held in early October the crucial need for the Indonesian government to adopt a comprehensive approach to managing sustainable nickel reserves.

This strategic move is aimed at preserving downstream objectives and helping to enhance value-added processes within the nickel industry.

Nickel mining and smelting operations have evolved into integral components of Indonesia's economy. In 2020, the Indonesian government imposed a ban on the export of unprocessed nickel ore, prompting a substantial influx of investments from various parts of the world.

Indonesia currently boasts the world's largest nickel reserves, which are predominantly channeled to fulfill the increasing demand from electric vehicle battery manufacturers. It is estimated that over half of the global nickel production for the current year will originate from Indonesia.

However, the extraction of new deposit areas has raised environmental concerns, and uncertainties surrounding ore reserves are on the rise.

Note: This article has been published in accordance with an article exchange agreement between JMD and SteelMint.