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Indonesia Targets 31 Smelters Operated in 2022

The Indonesian government targets 31 nickel smelter to be operational by 2022, with 20 of them projected to be achieved next year - Photo: TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian government targets 31 nickel smelter to be operate in 2022, with 20 of them projected to be achieved next year to help the production of electric car components, officials said on Wednesday (10/02), .

“Next year, 20 nickel smelter is projected to be operate and two years later it will be reached 31,” said the head of the mineral exploration business at the energy and mineral resources ministry (MEMR) Andri Budhiman in one seminar.

He assured, with so many smelters going into operation, there was no concern about supplies an electric car components to automotive factories. He ads, post-2022 nickel resource could be up to 42 years in the future.

Budhiman stated, based on the government’ rules as stated at MEMR Law Number 4 of 2009, the mining holders are required to process and refine the raw materials to added value products.┬áThen, the minimum processing and refining limits for metal minerals, non-metals, and rocks have been regulated by the MEMR Number 5 of 2017 and Number 25 year 2018.

In 2020, it is predicted that there are 20 million tons of domestic nickel ore needs. He explained that proven reserves for Indonesia’ nickel commodity of 698 million tons could only guarantee the supply of nickel ore for refining facilities for 7.3 years.

While estimated reserves (2.8 billion tons) still require an increase in modifying factors such as ease of access, licensing (environmental permits) and economics (prices) to increase proven reserves, so that they can meet the needs of purification facilities for 42.67 years.

With the age of these reserves not yet being able to meet the economic age of the purification facility, the government needs to take anticipatory measures in the form of a new policy, termination the recommendation for the export of low-grade nickel ore which took effect on January 1, 2020, he explained.

In addition, the policy-setting also aims to maintain the need for low-grade nickel ore as a raw material for batteries for battery-based electric motor vehicles, as mandated in Presidential Regulation Number 55 the Year 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program.

Based on the results of a government study, Budhiman explained that 40 percent of the total cost of manufacturing electric cars is from batteries. Electric vehicle batteries use a lithium-ion battery type with the raw material for the cathodes as Nickel, Cobalt, Lithium, Manganese, and Aluminum.

Indonesia itself is one of the countries that has the best raw materials in the world for producing lithium-ion batteries, namely low-grade nickel ore and high cobalt.

“The use of low-grade nickel as a raw material for batteries is a priority according to the Presidential Regulation on the acceleration of the battery-based electric motorized vehicle program,” he said.

The nickel export moratorium policy is a manifestation of the implementation of Law Number 4 of 2009 concerning mineral and coal which aims to increase the added value of minerals through downstream.

However, the mineral and coal law, which has been aged for 10 years, faces many challenges in realizing the industrialization of mineral and coal in the country.

For reasons of the need for a transition period, the government has several times provided mineral export relaxation as stipulated in Government Regulation No.1 of 2017. Where for companies that have undertaken the process of constructing refining and processing facilities or smelters are given mineral export leeway until December 31, 2021.

Through the MEMR Regulation No. 11 of 2019, the enactment of the regulation is then accelerated, where the ban on low-grade nickel exports will take effect starting January 1, 2020. So that from that time on, all nickel to be sent abroad must go through smelter facilities first.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com