The Ministry of Energy and Mineral Resources (ESDM) will issue a special regulation designating nickel and tin as critical mineral commodities.
The step is taken to safeguard nickel and tin reserves and resources as essential minerals as part of an effort to support electric vehicle batteries ecosystem and battery energy storage systems (BESS) as energy transition infrastructure in Indonesia.
Irwandy Arif, the Special Staff to the Minister of ESDM for Accelerating Mineral and Coal Governance, explained that the regulation will classify 46 mining commodities as critical minerals. The regulation is targeted to be completed no later than next month.
“The regulation on the classification of critical minerals is already 95% complete, with just one more round to go. Nickel and tin are included as critical minerals,” said Arif, on May 29, 2023.
Classification of critical minerals
Critical minerals are minerals considered to have high value because they fall under the category of minerals that are difficult to find.
Additionally, critical minerals are challenging to extract and cannot be substituted with other metals or materials. These minerals are also by-products of tin, bauxite, nickel, and iron sand mining.
The processing of dozens of mining commodities that will fall under the critical mineral category will be tightened by aligning the data on reserves and resources.
“The government is ensuring that these minerals are protected, and caution must be exercised. Indonesia will have around 46 to 47 minerals categorized as critical,” Arif stated.
The topic of classifying critical minerals was previously mentioned by Minister of ESDM Arifin Tasrif last week.
He stated that the ministry would issue classification regulations regarding rare earth metals in early June 2023.
“We are currently examining this matter. The Ministry of ESDM will issue classification regulations regarding rare earth metals. It is being prepared, and hopefully, it will be released at the beginning of the month,” said Tasrif at the Ministry of ESDM, on May 26, 2023.
High value-added potential of nickel and tin ore through downstream processing
Nickel and tin ores have a high potential for value addition when processed into advanced products through downstream activities within the country.
The price of nickel ore, which is valued at only US$33 per ton, can skyrocket to US$ 2,622 per ton and US$ 8,396 per ton after being refined into ferronickel and nickel matte, respectively.
These figures can go even higher when further processed into nickel bars valued at US$ 13,786 per ton.
Similarly, tin ore mining commodities also have the potential to generate substantial profits through downstream processing.
The current price for tin ore from mining is US$ 1,000 per ton, but it can increase to US$ 9,000 per ton after undergoing processing and purification.
The price of tin can soar even higher when it is in the form of ingots for manufacturing purposes, valued at US$ 16,250 per ton.
The regulation on the classification of nickel and tin as critical minerals is expected to strengthen Indonesia’s position in the battery and energy storage industries while creating opportunities for value-added activities in the domestic downstream sector.
As the Ministry of ESDM prepares to issue the regulation, the country anticipates the positive impact it will have on the mining and energy sectors.
