Indonesia has announced plans to limit the construction of nickel smelters in the country in order to encourage the production of high-value products. The country’s investment minister, Bahlil Lahadalia, said that the focus should be on downstreaming with 80% to 100% value addition, and that any new smelters should be powered by green energy. The country is also considering mandating new nickel smelters to follow green principles during production.
Why it matters:
This move by Indonesia is significant as it aims to encourage the production of high-value products, such as materials for electric vehicle batteries, and to promote the use of green energy in the nickel smelting process. Additionally, the country’s previous ban on exports of unprocessed nickel ore in 2020 was intended to promote the domestic development of nickel smelting, and this new plan to limit smelter construction further supports that goal. It could also potentially have an impact on mining companies operating in the country, such as Freeport-McMoRan, as they may have to adjust their operations to align with these new regulations.