The downstream nickel policy, which was initiated two years ago through a ban on nickel ore exports, is increasingly bearing fruit. Investment in nickel smelters or processing facilities in the country is getting more massive along with the electric vehicle fever that is happening in many countries around the world. Of course, the flood of nickel smelter investment in Indonesia is certainly not without reason. Indonesia will produce 1.6 million tonnes of nickel in 2022, ranking second after Australia as the country with the largest reserves in the world, namely 21 million tonnes. Launching Nikkei Asia on Saturday (13/5/2023), iron and steel giant from South Korea, POSCO Holdings (POSCO) will build a nickel smelter in Halmahera, North Maluku. The investment value of the smelter, which is targeted to be completed in 2025, is US$441 million. The POSCO smelter in Halmahera will process nickel into intermediate products which will then be used as raw material for electric vehicle batteries. It is known that the products produced by the smelter can be used to produce up to 1 million electric cars.
POSCO is not alone, Germany's leading chemical producer, BASF and French mining company, Eramet will also build their smelters in North Maluku. The investment value issued for the smelter is no joke, reaching US$2.6 billion. Later, the smelter resulting from the efforts of the two companies or joint-venture will produce nickel-cobalt compounds used in electric car batteries.
The leaders of the two companies are known to have met with President Joko Widodo or Jokowi Jokowi in Germany on April 16 2023 to convey their investment plans. The presence of POSCO, BASF and Eramet has made the nickel processing industry in the country even more lively. They are gradually shifting the dominance of companies from China that have already built their nickel smelters, especially in Sulawesi and North Maluku. The existence of smelters built by Chinese companies cannot be separated from the cooperation with local companies.
One example is PT Trimegah Bangun Persada Tbk or Harita Nickel which is building a nickel processing facility in collaboration with Lygend Resources & Technology, China. In addition, another example is PT Merdeka Battery Materials, a nickel processing company, a subsidiary of PT Merdeka Copper Gold Tbk, which partners with battery giant from China, Contemporary Amperex Technology (CATL). On the other hand, the nickel downstream policy in Indonesia succeeded in "reconciling" the United States (US) and China in the smelter construction project in Southeast Sulawesi. Ford Motor invests in PT Vale Indonesia Tbk's nickel smelter, the construction and operation of which involves Zhejiang Huayou Cobalt, China.
