Jérôme Baudelet, CEO of nickel company Eramet Indonesia, has predicted that in the next 10 years, Indonesia will become the world’s largest nickel producer following significant increase in production volume in recent times.

According to Eramet data, Indonesia supplied 55 percent of the world’s total nickel production in 2023, significantly increasing the world’s dependence on Indonesia’s nickel supply.

“We strongly believe that Indonesia will continue to be the center of global nickel production in the next 10 years. As much as 70 percent of global nickel production will come from Indonesia within that period,” Baudelet said in a statement on Thursday, November 7, 2024.

He cited that the Weda Bay Nickel, Eramet’s joint venture with Tsingshan, also shows rapid growth in production. By 2024, Weda Bay Nickel’s nickel production will reach 32 million tons in accordance with the production quota set in the Work Plan and Budget (RKAB).

Undersupply of nickel ore

Baudelet highlighted the undersupply of nickel ore in Indonesia this year. The surge in nickel ore imports from the Philippines further strengthens this indication.

Based on Statistic Indonesia (BPS) data, Indonesia imported around 7 million tons of nickel ore from the Philippines in the first 10 months of 2024, compared to only 374,454 tons for the whole of 2023. According to the statistics, nearly 60 percent of the imports have been shipped to the port of Weda Bay.

Although imports still account for a small portion of Indonesia’s total nickel consumption, high demand has pushed nickel ore prices higher than the minimum benchmark price (MSP) set by the Indonesian government.

“This nickel ore supply shortage is creating market tension in Indonesia, despite the fact that the global nickel market is still oversupplied with finished nickel products. However, it should be noted that this oversupply is relatively small, estimated at around 60,000 tons, equivalent to about one week of consumption,” Baudelet said.

Growth potential

Eramet is optimistic about the future of nickel production in Indonesia. With abundant resource potential in Weda Bay, the Eramet joint venture aims to increase production to 60-65 million tons per year in the medium term.

“With the support of abundant natural resources in the long term, we are committed to maintaining a balance of supply. We don’t want to produce more than the market needs,” Baudelet said.

He emphasized the importance of innovation and sustainability in natural resource management.

“Indonesia is a top priority for Eramet in its nickel business development. Eramet wants to be part of the growth of the global nickel industry and provide positive benefits to the Indonesian economy. We continue to strive to establish strategic partnerships with companies, both from Europe and Indonesia, to support the growth of nickel industry in Indonesia,” he concluded.