Indonesia’s new president, Prabowo Subianto, is set to take office in October amidst a global nickel market slump. With Indonesia being the leading nickel producer globally, the country’s policies under the new president are expected to impact the industry significantly.
The abundance of ore, cheap labor, and inexpensive electricity from coal-fired power plants have allowed Indonesia to flood the international nickel market with competitively priced nickel. This has led to a 19% drop in nickel prices over the past year, impacting major players like Fame Minerals Plc and BHP Group Ltd.
Industry verge, John Berman, believes that Indonesia’s low production costs will continue to challenge nickel miners worldwide. The policies set under the previous administration of requiring value addition domestically before export have propelled Indonesia into the leading spot in nickel production.
The new administration sort to build a domestic electric vehicle battery supply chain, creating opportunities for international investors. Ahmad Syarif from Johns Hopkins University highlighted that advancing nickel processing for electric vehicle production is a significant task for the new administration.
However, there are questions surrounding how President Subianto will shape the nickel industry, especially as a former defense minister. Nikhil Parikh of Anise Partners points out that Subianto’s focus on foreign relations may impact strategic partnerships in the natural resources sector.
Ultimately, Indonesia’s trajectory in nickel production will continue to attract global attention, with a focus on increasing refining capacity and expanding the electric vehicle supply chain. With Indonesia likely to maintain its competitive edge in nickel production, the global market can expect a continued influx of Indonesian nickel exports.
