Indonesia Business Post interviewed the secretary general of Indonesia Nickel Miners Association (APNI ) Meidy Katrin Lengkey on October 15, 2023. APNI was established on January 6, 2017 in Jakarta. The association has a commitment to transform nickel as Indonesia’s natural resource into the wellbeing and the sustainable development of Indonesian people with best mining practices.
The association also prioritize the wellbeing of the members, the people, human resource development, social responsibility and environment and job creation.
Meidy Katrin was born in Manado, North Sulawesi on April 21 ,1978 . She was involved in the logging industry before jumping into the nickel mining business and becoming the secretary general of APNI. She talked about China domination in the Indonesia nickel processing industry, fraud and illegal mining, illegal exports, export ban, policy improvement, WTO lawsuit, and all other aspects of Indonesia nickel industry.
Q:How has this political year and this year’s presidential election affected the nickel industry?
A: Whoever is the president and the leader of our country, we will still ask the government to continue with the new concept and added facilities and with whatever it is, as long as it benefits the country. Don’t stop it. People have invested in this nickel downstreaming industry.
For example our new association which is 6 years old, this year alone we have been invited to 18 countries. So we are very proud because of the success of the downstreaming, Indonesia has become a very famous country.
For example, yesterday I just returned from the London Metal Exchange in London, then in Lisbon in Portugal to talk with the Nickel Study Group Institute, and then listen to world experts. What was discussed was Indonesian nickel. It’s a bit funny I tell you. At the time of discussion in the London Metal Exchange, they talked about Indonesian nickel because we have the resource, the raw material. All of the people are focused on Indonesia.The problem is that Indonesia which has just made nickels processing and refining products and it is almost destroying the world market. Why?
Indonesian nickel processing products are now oversupplied. I myself was surprised that there are so many nickel products from Indonesia, even though they are still exported to China, which will affect the price. There are pluses and minuses but whatever it is, in the oversupply in the foreign market.
As one of the nickel players, Indonesia secured world’s recognition for its success of developing downstreaming industry. Our association, the Indonesian Nickle Mining Association (APNI) also received the recognition of our success, especially in our struggles on work plan and budget (RKAB). Just last month, we struggled for more than a year regarding the RKAB. And we have to submit the RKAB to the government to carry out production activities every year. Praise God we succeeded again, and we ask Sir,please do not require us to submit the RKAB every year to improve efficiency.
To make it more efficient, especially if everything is centralised. We all know how many human resources are available in the Ministry of Energy and Mineral Resources. Human Resource at the Ministry of Energy and Mineral Resources to oversee all mines in Indonesia. As we know, Indonesia has more than 6,000 mines. So, the ministry has no capability, and they cannot work efficient and effective in monitoring all the mines, as consequence they will harm all stakeholders. So, we propose to the government that the mining company should submit a 3-year work plan and budget in one production process. There is no need to submit the work plan and budget every year.
Q:So why is Indonesia’s nickel industry dominated by China, for business reasons?
A: I travelled a lot and met many top-players in Europe and the US to discussing with the people from different cultures, different mindsets. I like Chinese because they are very fast, I negotiated with China, it’s very easy, they have no political targets. For Chinese if they want to invest, they have calculated the risks and losses. As long as I can dominate the industry, what I think is my profit and how long I can get the profit? Thats it.
While in other countries, I do not disparage them. They have not invested yet, but they have asked for various kinds, very long requirements, they have too many calculations of numbers. For example, they will ask about the guarantee, warranty. Hey, if we want to do any business in any industry, not just mining, all industries, if you ask for guarantees, please don’t do business. We have to be brave. For example, when we shop some goods online, from 10 things that we buy, around 3 to 4 of them will be destroyed. It’s impossible for 10 of them to meet our expectations. But the 6 of them that are good and cheap can cover the three losses or less. That’s what I conceptualize on how we cooperate with Chinese companies.
Q: If companies outside China, they are highly regulated by their international political policies?
What I see is that the Chinese government in this case is very, very supportive in term of finance, and capital. I’m not saying where is Indonesia, how come no one supports the player?
However, I have been invited several times by the Chinese government. The Chinese government in terms of any discussion, regarding the overview of Indonesian nickel, and I can conclude how supportive the Chinese government is to Chinese entrepreneurs to invest not only in Indonesia, in all countries. They are like a virus, mushrooming everywhere. Not just mining. If I come to other countries, the Chinese are all there. Where is Indonesia? Where are the support from the government that determines our investment and business in other countries.
Q:You are often invited by the Chinese government. What interest do you think they have in nickel in Indonesia, do they want to develop the EV industry in Indonesia?Indonesia also want to be an EV hub in Asia and globally. If they continue to buy and dominate, are we not afraid for our position that wants to become an EV hub to be dominated by China? ?
A: Doing the process, there is no 1000 steps without 1 step ahead. Our nickel downstream process has been very successful. Our second-grade nickel has been processed by or… in quotes still controlled by China and it is in Indonesia and indeed they are still sent to China to be processed again. We have collaborated with other countries to … so there are 5 steps towards electric vehicles and 5 steps towards stainless steel.
The first step, it has been done by China, namely Nickel Pig Iron , ferro nickel or nickel mate or whatever it is, we have invited Korea. We know that Korea has succeeded in battery and Electric Vehicle . I myself use EV from Korea. We invited Korea, but we tell them not to enter the raw materials. The Korean can cooperate with China. You make the battery, you have the technology, make it in Indonesia . We have succeeded in the MoU with LG, it is in the process yes.Then Samsung is … we are in a position to determine, the recommendation is that you cooperate with factory A, you take the raw materials, you process them into re-sale materials. You have the technology, you import Lithium and graphite and you make it in Indonesia.
Indonesia provides extraordinary facilities and incentives. Sometimes we as local entrepreneurs are jealous to foreign direct investment. They get a lot of facilities, a lot of incentives, what about us? We don’t get any facilities, we don’t get any incentives, but we still support Indonesia. Why Foreign Direct Investment is extraordinary in Indonesia, not only because of natural resources, I think there are also many other commodities. They are given convenience, they are given facilities, they are given free.
Q: Do you think that’s fair for local entrepreneurs?
A: As an entrepreneur, I want to branded products. Currently, the Indonesian government is working on how to place export tax. After foreign direct investments have made profits, it’s time for them to pay the state. As an entrepreneur, I want to brand my product, I want to give a discount first, it’s not free. I want to give discounts first to attract interests, it’s called branding.I see that the Indonesian government has succeeded. But don’t take too long . We talk about the development of downstreaming industry to increase value added, but we give everything for free, what is the value added? Has the GDP for certain regions increased with the nickel downstream? We have to look at the facts on the ground. We’re not downplaying. We’re new players. We’re giving inputs to the government, what are the facts? What else should we fight for to increase revenue related to value added.
Q: So it is still not fair?
A: I can’t touch politics. As nickel mining association, we are in the middle,. How to voice the voices of the actors, miners and nickel entrepreneurs to the government and convey what the government’s intentions and objectives are to the actors. We are the bridge. The bridge is how to connect what is the need of each party or all stakeholders that so far we have succeeded in BKPM, the 3-year RKAB, the transaction business process. We ask for the digitalisation of mining which will later be launched for SIMBARA, the mineral and coal information system. The interests of the actors that are the needs of the actors that we can convey to the government but it can increase state revenue.
Q: Who are the member of APNI?
Association of Indonesia Nickel Miners has members consist of nickel business actors. The main members are mining companies that are clear to obtain official licences from the government. Now we have companion members, there are also traders, many trader companies. If you want to join a mining business but you do not know mining, so you can be a trader. Then, contractor companies that carry out business activities in nickel mining, then there are many factories that are our members, then there are vendors also. The vendors have technology that we can convey to users.
Q: We heard that a ,miner should sell their nickel ore to trader and not directly to smelter , is it true ?
No, traders are B to B .Sometimes, there are miners, which I said earlier, eh you invest in me or you buy from me, where to sell is up to you. There are many traders, traders must make profits. And it is not regulated by the government. You may or may not sell to traders. Sometimes we need traders. The smelters with their core business of processing also have to deal with miners, with each actor has different interests and desires. The smelters formed trader companies so that they would deal there with the miners. Traders are quite numerous in Indonesia not only in nickel but coal, in all commodities there are also traders.
Q: We heard also that smelters appointed Surveyors to determine the content and price for their own benefit ?
Yes we have problem with 11 surveyors for example we sell in FOB which was previously the level of contents of our nickels was 1.8 , when we arrive at their ports the content has been decreased until t 1.5 or 1.6 and finally it had an impact on the results of the analysis. The payment will be different. The value is different. In this case, it is true that there were several cases yesterday where the difference was too significant. Meanwhile, the 11 surveyors appointed by the government to carry out quantitative and qualitative analysis activities in nickel are approved by the government.
Of course there is already standardisation, there are already SOPs and procedures, accredited and standardised according to government SOPs. In this case, the surveyors who conduct the analysis have the same method of analysis. Perhaps the business sampling process is different, and the results from the lab are different.
I don’t blame traders, I don’t blame smelters, I don’t blame surveyors, but standardisation is important so that fraud does not occur again, because this fraud has an impact on state revenue, namely royalties to the government.
Q: Let’s move on to China, again and then talk about Chinese companies that are not in line with ESG standards?
We are in the process of learning, I think it’s not just nickel, this process is ongoing, this process takes time. If we talk about environmental, I think it’s not just nickel. All the world’s commodities too, that this process is ongoing. This process takes time.
If you look at it, it’s not just an issue. There are many who go directly to the field to check the supply chain of mining process from raw materials then to the processing of nickel ore into MHP or nickel sulphate whether it is proper or not. The supply chain is still under discussion, where we want to make new energy products but the process is not green energy. Is the process really green? Not really. In this case, how to collaborate with third parties who can teach us. Association of Indonesia Nickel Miners has collaborated with America because it is related to IRA, our ESG is not proper so we cooperate with United State Geological Survey, US Energy Council and invited experts from Europe who have succeeded in ESG like Vale, with Eramet which have been around for hundreds of years. We copied their success in implementing ESG, … the community around the factory has maximised their lives, improved their lives.
Q: We heard also about rampant illegal mining activities ?
Illegal mining and illegal exportation are not only in nickel. We were under the leadership of General Nana Sukarna, the former Deputy Chief of Police, who was so idealistic and nationalistic. Illegal mining is allowed to be ingrained from the past. We are so embarrassed by the practices . I went to several countries to promote nickel mining, once the foreign investors got here, they told me how come it doesn’t match what you said. It’s embarrassing. I challenge the chairman, what role do you take in dealing with illegal mining?. APNI’s called it pelakor or home wrecker. Home wrecker or pelakor is dangerous, they are miners outside the coordination and corridor. The illegal miners use doctors and condoms. Condoms are domestic consultants, doctors are flying documents. To get a doctor they use a condom.
If you want to take the goods or products, what is happened if there are no buyers? There are factories that want to take it, accept it. If you want to become an illegal miner , you requires investment, investment is not just Rp 100 million or Rp 200 million or one billion, this is a huge investment. They have an opportunity, a market and they have supports.
Q: What about illegal exports?
When I went to China, there were these nickel products, the source is from Indonesia. APNI conveyed this findings to the government. Why is there nickel ores in China, which in fact by regulation has been stopped. We are facing a WTO lawsuit because we banned the export of nickel ore but why is there Indonesian ore in Chinese ports. I asked the government to investigate. When I travelled to China, how come there is ore from Indonesia. I was confused, we told the government where the source of nickel ore from Indonesia came from, who is the source, from what company? We don’t know. I only get data that there are already products there, will the customs there reveal who this information is from? No, ma’am. Let it be the government’s job to investigate who the bad actors are because the state losses are extraordinary.
Q: Based on your findings, From January 2020 to June 2022, there were a total of 5.3 million tonnes of illegal exportation?
The figure is enough to pay royalties, if we export, we have to pay 10% royalties, 10% export tax, there is 20% that we have to pay the state. If the sales value is at least US $ 32 per ton, no need to be that big, 5.3 million tonnes, how much state revenue is lost?. Now it is being eradicated. How do we want to export while there is a smelter here that imports from the Philippines. I support imports because I want to import from anywhere as long as the process is in Indonesia. I am proud to because at least the import can maintain our resilience. It’s funny that there are those who export and those who import. So it’s like a joke.
Q: So the importation is just a business game, not a shortage?
No.
Q: If we go back to the primary challenges and opportunities, what are the challenges and opportunities in developing the nickel industry?
A: One challenge is how the government in this case integrates all ministries. If we talk about mining, the Ministry of Energy and Mineral Resources, the Ministry of Industry, the Ministry of Finance because it collects taxes, the Ministry of Transportation and the Ministry of Environment and Forestry. We are talking about one industry, with 5 related ministries. The challenge is how to integrate and coordinate these 5 ministries so that there is no sectoral ego that will harm business actors. Earlier, I said that the licence is given by the Ministry of Energy and Mineral Resources, we continue to talk about taxes but we cannot produce because the Ministry of Environment and Forestry does not have a quota for us to apply for forest use permit. Hopefully , our hope is that with the new President, the future leader can integrate all of his assistants to work together, because sometimes the data of the Ministry of Industry and the Ministry of Energy and Mineral Resources have different data because they are not integrated.
Another challenge is how our government cooperates with local governments. In the regions it is the local government who know the root causes of social problems, politics, conflicts. If all affairs are handled by central government, the human resources are not qualified.
Secondly, what kind of monitoring do they do? The government should involve the local government. Earlier, I asked for the integration of all related ministries. Local governments must also be involved in this, because if anything happens, the local government budget also will be spent. Conflicts, demonstrations, floods and landslides, they are all handled by the local governments too. We must be solid first, before we show our concern for our foreign investors .It is fair, if the businessmen secure the profits, state revenue increases and 1945 Constitution is implemented. The Indonesian people can get the benefit from this development of downstream industry .Slowly from this nickel Indonesia can become a superpower, our society will be more prosperous. What is certain is that entrepreneurs must be happy. How can entrepreneurs be happy? If the can run their business well and secure profit.
Q: As the largest nickel reserve in the world, is this an opportunity for Indonesia to become a Geopolitical power in the world? How does our position affect our geopolitical position? Is the government’s role in using nickel as a powerful geopolitical weapon? Has it been maximised or should it be maximised?
A: Maybe if we talk about geopolitics, we can wait until next year. Because we are not in an injury time position with the change of leadership in 2024.But if we talk about Indonesia as rich country, Indonesia does not need other countries, but other countries need Indonesia. Because Indonesia hold the raw materials. Every industry without raw materials is nothing, not just for nickel, but all industries.
Back to the supply chain. If Indonesia plays a role on how do we control the world from our natural resources. This is just nickel. Next year there are other minerals that will be copied like the success of nickel. We learn from the success of nickel. With Indonesian nickel, we are taken into account by the world, and I myself feel the world’s recognition of APNI for the success of the development of downstreaming industry.
Q: You were invited in many countries ?
A: Yes, that’s what I said earlier, I’m tired of living on an aeroplane, going to which country for a while, going to other country for a while and mostly far away. However, whether we want it or not, for the sake of Indonesia, we are struggling, we are tired, we are wasting our energy but to get world recognition for the success of Indonesian nickel. But, don’t let the world recognise our success, we still have a lot to improve. So , this is a real challenge for the players and stakeholders, both industry players, mining players, both the government in this case, on how we integrate everything until we have a full strength in which we are taken into account by other countries. Why? Because for example, when there is a war, Israel vs Hamas or Ukraine vs Russia, there is an impact on us also. For example, during covid, we were told to keep our distance, we were told to work from home,but the mine was still running. So there is no an impact on us despite the fact that we are told to work from home or what used to be called PSBB.No. Roughly speaking, if we don’t work, who will feed us? This means that we are successful for that.
Geopolitically Indonesia plays a role in new energy. Keep it, we will determine on how zero emission, carbon footprint with devices from Indonesia.The arena towards green energy is called new energy, new energy comes from raw materials, what is the raw materials for the new devices of new energy ? They came from nickel.
We are rich in natural resources. Natural resources can be a disaster for Indonesia and can be a blessing for Indonesia depending on the implementation of monitoring and state revenue.
Q: There must be more cooperation between all stakeholders to make nickel the key to Indonesia and several other minerals? What is the most requests from these countries?
They are curious to know about what happens in Indonesia? What is it in Indonesia? There is nickel. If there’s nickel, you call me. If there’s no nickel, you don’t call me. They are quite proud and they are curious to know about the success of Indonesia. What the hell are you doing that you it is not for 10 years yet but you have been successful. I don’t think there is a single country in the world that can do what Indonesia is doing. And I am currently invited by the Philippines and every year by South Africa.
They have the same raw materials in Africa, not only nickel, they have Lithium, they have cobalt too, they have graphite. How come they cannot be successful like Indonesia. And this time, I was invited so they can copy it. The Philippine government and the South African government in this case want to follow Indonesia’s style in developing the downstreaming industry. Am I proud? Proud that we don’t do anything. It’s not that we don’t do anything. We’re only kindergarteners, but someone has already asked me to teach them. That is, because of the success of Indonesia’s downstreaming, then because of the extraordinary issues we want to raise environmental issues, social issues, government issues, but there is material for discussion so that it becomes our discussion to act more in the future.
We also invite several third parties for commodity pricing, of course we are in the process of indexing Indonesian nickel which we will sign an MoU with the world’s pricing.It’s not easy to work with them.
Q: Moreover, it’s in their interest too, isn’t it?
A:Yes. But this is for Indonesia, not for them, but they want to help us. For example with the Shanghai Metal Market (SMM) how come they want to? Even though it is not for their benefit.
Q:What kind of regulatory or policy improvement that you hope from the government?
A: We are not arrogance but we are proud that what APNI requested earlier, which I called the benchmark nickel price, is underway. Then the governance in order to implement good mining practice is underway, the work plan and budget (RKAB) for three years has also been approved. Currently we are waiting for the revision of ministerial decree number 1806 which will be out this week, because we submitted for 2024, 2025 and 2026 at the beginning of November, next month. Then we are also in progress for formulating the Indonesian nickel index and the implementation on the index has been approved.
In the future, we ask the government to integrate all stakeholders, all ministries and local governments and APNI also in terms of monitoring. So that there will be no more illegal mining. What APNI is fighting for is generally applicable. The rules apply to all mines. So we are fighting for monitoring, controlling for the entire supply chain from exploration, production, tracking and processing at the factory. The government must have a database in the framework of the supply chain, which is currently about to be launched for SIMBARA, the mineral and coal information system. Hopefully this will be implemented as expected, but the controlling is necessary so that there are no more illegal mining. What if APNI’s language is not only taking action but also providing solutions and most importantly non-conspiratorial. Non-conspiratorial, please understand it yourself.
Q: The last question, currently related to the WTO lawsuit against Indonesia banning of raw nickel exports. What is APNI’s position regarding this, what impact do you think to other countries EU, Australia and US?
A: If you ask me whether I support the ban or not ? If you asked me in 2019, as a businesswomen , I did not agree. At that time we said, if the government stop exporting, where do I sel my nickel ores?
This is happening to bauxite now because they will be banned from exports but there is no bauxite smelters now. So in 2019, government suddenly ban the export of nickel ore which should be banned in 2022 . So the government accelerated the ban in 2020. We are not ready. Why? That’s why, where will I sell my nickel ores If government stop the exports.
However now with the government’s encouragement to develop nickel downstream activities, and over supply condition please stop the exports. So it’s funny, sometimes the situations and conditions affect policy. If in that year around 2019, when the government want to stop nickel exports, we asked the government to postpone the export ban because there was no smelter , there was no market. If you ask me now, sir, please stop the export , the smelters are mostly oversupply, there are a lot of oversupply of Indonesian nickel. Finally, there are over demand for the domestic market.
We have the role, the developers have the role, where do I want to sell it? So I said that the condition factor affects our policies and decisions. At that time there were no factories and now there are many factories.
Secondly, if we talk about the European Union, are there any nickel ore products exported to the European Union? No. China. But most of the exports are to Asia, to India, Japan, China, etc. But the export ban has impacts on European factories because the supply of raw materials come from China. If the supply from China is disrupted the European Union factories will have stagnations as well. In this case, actually if we stand in that position, Indonesia is rich, but don’t be rich alone, share it. Other countries will be affected very bad if they do not have supplies of raw materials for production.
Other countries that are producing and then there is no raw material, I die. Because the ban will have a long domino effect including on labour, state revenue and others. But if Indonesia gave in, Indonesia would not smelters here . So we asked those countries to build smelters here . What’s the difficulty in moving their factory here, with the incentives we provide? The impact on their countries is only reducing employment there. In the economic business system it is more profitable for those foreign countries to build factories here, because we have more facilities, the source of raw materials is in sight. They just have to dig with a shovel like that. Instead of Indonesia having to export. If I export nickel ore from Indonesia, to the mouth of the factory, apple to apple how many times the difference. But still profitable? Yes , profit.
Q: What were the response from EU and the US when you talked like that ?
A:Yes, it’s from the International Monetary Fund , they requested please open the nickel ore export again. Because their language is the same as mine, isn’t it fair that you have the raw materials while other countries can’t enjoy it? But again, our success is an example for other countries. Earlier I mentioned that the Philippines will participate, South Africa will also participate, they have the same raw materials as Indonesia. It just depends on our strength, where is our president? Indonesia must survive because it becomes an Indonesian legacy .It is Indonesia that have the raw materials, why do you manage it? It is again how to make people dependent on us, it’s fun. How to make our country’s natural wealth, which is envied by other countries, a source of prosperity for the Indonesian people.
Q:Finally, do you think there is a middle ground in the WTO lawsuit?
A: When we lost the trial, I was one of the teams. I presented some facts: if we don’t ban the export of nickel ores , there will be no downstream industry and there will be no smelters that are mouldy, over in Indonesia. So we keep banning the exporting. With the export ban , we can become an Arab country, the world’s oil ruler. Now the new oil commodity comes from green energy, green energy comes from new devices, new devices come from new energy and new energy comes from nickel.
