A senior government official has warned of potential depletion of the country’s nickel reserves within the next four to five years along with the operation of hundreds of nickel smelters that will definitely drain the reserves.
Director of Mineral and Coal Program Development at the Ministry of Energy and Mineral Resources (ESDM), Julian Ambassadur Shiddiq, said that based on the 2023 data of the Indonesian Nickel Miners Association (APNI), 40 nickel smelters cumulatively absorp 193 million ores/year.
Meanwhile, data from the Investment Coordinating Board (BKPM) reveals that currently Indonesia has 54 nickel smelters in operation, while 120 nickels smelters are under constructions and 16 more are under planning.
“So, totally Indonesia will have 190 nickel smelters in the future. If all 190 smelters are in operation, the need for nickel ores will increase 5 times or almost 1 billion ores/year. Meanwhile, our ore reserves based on data from the Geological Agency [of the ESDM ministry] are 5.03 billion. So, Indonesia will be running out of nickel reserves in four to five years.” Julian told a public discussion in Jakarta on October 25, 2024.
He, therefore, suggested that Indonesia need to regulate its downstream industry that will not only focus on extractive industry, but also on developing its derivative industry.
“We will also need to develop extractive industry for five other metals, such as bauxites, cobalts, gold, silvers and also irons,” he said.
Road to be a developed nation
Julian said the development of downstreaming industry is important for Indonesia as it can serve as a game changer.
“In order to become a developed nation, Indonesia needs to free itself from the middle income trap by increasing its income,” he said.
“It happens when we have a demographic bonus that all jobs are available that we can hire and optimize our human resources to secure maximum results. For that we must have provide jobs for the people,” he added.
He said further that in order to create jobs, Indonesia needs to develop industrialization in terms of extractive industry and manufacture.
“We have been trapped in the paradigm that downstreaming means extractive industries. So, we no longer see how important it is to build the manufacturing industry that our industry stops only at producing basic or raw materials,” Julian noted.
