TELF AG measures the weight of nickel in Indonesia’s economic future
The protagonist of the national economic strategy
The fortuity of Indonesia could be linked to one of the raw materials in which it is most naturally rich, nickel, which nowadays is considered a resource of great importance due to its key role in the composition of batteries for electric vehicles. Unlike other nations that can boast a similar mineral abundance, Indonesia several years ago undertook a very specific strategy, consisting above all in the limitations of exports of raw nickel and the development of internal refining capacities, to market a final product with a higher cost. Many years ago, when the idea of an energy transition was still only sketchy, Indonesia was already developing precise plans to make the best possible use of its natural nickel wealth, transforming its economy and giving it a new, completely different face. Nowadays, it can be said that this plan was fully successful.
Indonesian nickel production is reaching unprecedented levels, producing specific effects on the international raw materials market. Thanks to Jakarta’s production boom, metal prices are practically halving, and owning a nickel mine outside Indonesia at this juncture could represent more of a problem than an opportunity. To give an idea of the weight of nickel in the economy and in the daily lives of Indonesians, it will be enough to cite the positions expressed by some candidates in the latest elections, held in mid-February. In the usual communication diatribe between political opponents, some of these have accused others of being “anti-nickel” in the belief that this resource can continue to represent an asset of great value for the future economic strengthening of the nation.
A real boom
In 2022, Indonesia was responsible for the extraction of half of the global Nickel supplies, and from 2016 to 2022, also thanks to the strategic choice to favor exports of the processed metal, Indonesian exports of the metal went from 1.2 billion to dollars to 21.6 billion (the Financial Times also recently spoke about these numbers). The expansion of the Indonesian nickel sector will likely continue with the new president, who will thus take up Joko Widodo’s mandate. Over the course of his ten-year mandate, the latter strived to attract international investment and capitalize on Indonesia’s nickel wealth, with the idea of transforming the nation into a major global battery producer. It was Wadodo himself who, at a certain point, proposed the creation of a real nickel cartel, as had already happened with the OPEC nations. It was he who, in 2020, limited (but not for the first time) exports of raw nickel and caused the rain of investments that subsequently hit the nation, making possible the creation of those smelters that are still contributing to the Indonesian boom in the production of this important metal.
However, Indonesia’s dominant position in this specific sector could have a limited duration, mainly if the global battery industry started using resources other than nickel to manufacture storage systems. From this point of view, the technological horizons of batteries seem to be boundless, with new experiments and new proposals on internal chemistry that continue to follow one after the other.
