Antam Expands Role in Indonesia’s Nickel Supply Chain Amid Growing Domestic Production
Indonesia, home to the world's largest reserves of nickel ore, has been leveraging its vast deposits to drive domestic industrialization. Much of Indonesia’s nickel, concentrated on or near Sulawesi, was historically exported in unprocessed form. However, in recent years, nickel has gained new importance as a critical material in the global transition to clean energy, particularly for its role in the production of lithium-ion batteries.
To capitalize on this opportunity, Indonesia banned the export of unprocessed nickel ore several years ago, aiming to force companies to refine the ore domestically. This policy has been highly successful, with billions of dollars of investment flowing into Indonesian nickel smelters and industrial parks. The export ban has led to a surge in refined nickel production, so much so that there is now a global supply surplus.
The rationale behind the export ban was to ensure that more of the value created in processing nickel remains within Indonesia. Instead of simply exporting raw ore, domestic processing increases the economic benefits for the country. This shift has been beneficial for Antam, an Indonesian mining company 65% owned by the state through the holding company MIND ID.
Before the ban in 2018, Antam's revenue was around $1.6 billion, with 43% coming from exports. By 2023, revenues had grown to $2.6 billion, but only 14% came from exports, as most of Antam’s nickel ore was absorbed by domestic smelters. In 2022, Antam produced 13.5 million wet metric tonnes of nickel ore, up from just 1.7 million tonnes in 2019, signaling the success of the export ban in fostering local consumption.
However, Antam's long-term ambition extends beyond mining. It seeks to play a larger role in the downstream processing of nickel. Currently producing ferronickel, which is used in stainless steel manufacturing, Antam has faced capacity constraints at its smelters, which have been operating at full capacity for several years.
To address this, Antam recently announced the acquisition of a nickel smelter from China’s Tsingshan Holding Group, a key player in Indonesia’s nickel processing sector. Additionally, Antam is collaborating with Chinese firm Ningbo Contemporary Brunp Lygend to build two more processing facilities. These moves indicate Antam’s strategy to expand its processing capacity and eventually produce higher-value, battery-grade nickel, which is crucial for electric vehicle (EV) batteries.
Indonesia’s nickel export ban has triggered an investment boom in domestic processing, with Antam positioning itself to take on a more significant role in the nickel value chain. The long-term goal is not just to produce more ferronickel but also to increase Indonesia’s capacity to produce refined products like nickel matte and battery-grade nickel. While it is too soon to determine whether Indonesia's nickel strategy will fully achieve its objectives, Antam’s increasing involvement in smelting and refining is a key step in that direction.
