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Indonesia president-elect Prabowo Subianto to expand downstream nickel industry. (Photo: iStock)
Although electric vehicle (EV) sales are sluggish, the team of Indonesian president-elect Prabowo Subianto has pledged to promote sustainable development in the downstream nickel industry, aiming to drive the country's economic growth and contribute to achieving an 8% GDP growth rate.
Indonesia supplies over half of the world's nickel products
Eddy Soeparno, the deputy chairman of Prabowo's campaign team, stated on the 30th that the downstream mineral industry, including nickel, adds value and can drive energy transition through the electric vehicle ecosystem.
With rich nickel resources totaling 55 million tons, Indonesia holds 42% of the world's nickel reserves. Last year, nickel product exports reached 160 trillion Indonesian rupiah (about 10 billion USD), supplying 55% of the global market, with expectations of a significant increase to 64% this year.
Since 2020, President Joko Widodo has imposed a complete ban on nickel ore exports, requiring that it be refined before being exported. Prabowo plans to continue this policy, expanding the development of mineral processing industries to solidify Indonesia's leading position in the global nickel supply chain.
Before the election, Prabowo boldly stated his intention to elevate Indonesia's economic growth from 5% to 8% within five years, highlighting that the nickel industry will be a key driver of economic growth. By incorporating sustainable development concepts, he aims to further enhance its influence.
Three major challenges for sustainable nickel industry
Eddy acknowledged that ensuring sustainable development in the industry is a significant challenge, as it involves not only economic aspects but also environmental, social, and governance (ESG) principles, particularly regarding clean energy, such as reducing reliance on coal-fired power plants.
Bhima Yudhistira, executive director of the Center for Economic and Law Studies (CELIOS) in Indonesia, pointed out that many smelting facilities are concentrated in industrial parks with heavy investments from Chinese companies, which often rely on coal-fired power without being connected to a grid, leading to substantial carbon dioxide emissions.
Research institution Katadata Insight Center (KIC) also highlighted three key questions that Prabowo's government must consider in planning for the sustainable development of the nickel industry: how to manage investments in nickel smelting plants, how to utilize renewable energy, and how to ensure land rehabilitation. Addressing these issues is essential for guiding market development while balancing carbon reduction and promoting a green economy.
Source: Tanahair、Dialogue Earth
