The Ministry of Energy and Mineral Resources’ Geological Agency reports that Indonesia has a land area of 2 million hectares with nickel potential, out of which only 800,000 hectares have been mined or exploited.
According to the Geological Agency’s data, Indonesia’s total ore reserves currently amount to 5 million tons, with a resource quantity of 17.33 million tons.
Nickel is classified as one of the 47 critical mineral commodities by the Ministry of Energy and Mineral Resources. As of November 2023, Indonesia’s nickel reserves were reported to be around 5 billion tons, with 3.5 billion tons of saprolite and 1.5 billion tons of limonite, according to Tri Winarno, the Director of Mining Program Development at the Directorate General of Mineral and Coal.
Tri Winarno explained that mechanisms, including area auctions and assignments, are in place to increase nickel reserves.
Exploration research is conducted by research institutions after winning bids for designated areas. While there is a possibility of discovering new nickel reserves, the specific locations are yet to be determined.
Tri Winarno mentioned the likelihood of these areas being around Sulawesi Island. However, as of now, there are no plans for new nickel reserve discoveries.
Nickel reserves challenges
As of June 2023, nickel is gaining prominence in the mining industry, primarily used in the production of stainless steel.
The increasing shift from gasoline-powered to electric vehicles has further fueled the demand for nickel.
Indonesia, blessed with vast nickel reserves, stands as the world’s largest owner of nickel deposits.
According to the 2020 Nickel Booklet released by the Ministry of Energy and Mineral Resources (ESDM), Indonesia’s nickel ore reserves reach 4.5 billion tons.
Additionally, its estimated resources are even more extensive, totaling 11.7 billion tons. Approximately 90 percent of these nickel sources are distributed in Central Sulawesi, South Sulawesi, Southeast Sulawesi, and North Maluku.
The allure of Indonesia’s nickel potential has attracted numerous investors eager to mine and establish refining plants (smelters).
Foreign investors, especially from China, have flocked to build smelters in eastern Indonesia, a nickel-rich region.
However, nickel, like coal, is a non-renewable commodity. Continuous exploitation could deplete its resources over time. Calculating the resilience of nickel reserves involves considering the refining technology.
Nickel comes in two types: high-grade nickel with more than 1.5 percent content (saprolite) and low-grade nickel with less than 1.5 percent content (limonite).
Saprolite nickel is processed using pyrometallurgical smelter technology. As of 2020, the ESDM recorded saprolite reserves of 2.6 billion tons.
Pyrometallurgical smelters process saprolite nickel up to 95.5 million tons per year, estimating the lifespan of saprolite reserves until 2047.
As for limonite nickel, its reserves amount to 1.7 billion tons, processed through hydrometallurgical smelter technology. Hydrometallurgical smelters require an annual input of 24 million tons of limonite nickel. Based on these figures, limonite nickel reserves are expected to last until 2093, around 70 more years.
The Indonesian Mining Experts Association (PERHAPI) estimates the lifespan of saprolite reserves to be approximately 16 more years.
This calculation is based on geological data reporting saprolite reserves around 3.3 billion tons and the current demand for pyrometallurgical smelters (RKEF) being approximately 215 million tons per year.
In contrast, limonite reserves of 1.67 billion tons and the need for hydrometallurgical smelters (HPAL) at 60 million tons per year suggest that limonite nickel reserves could be depleted after 30 years.
“The HPAL product is generally directed towards use as material for electric vehicle batteries,” said Rizal Kasli, Chairman of Perhapi, emphasizing that there are still relatively few smelters processing limonite nickel due to the relatively high capital expenditure involved.
