Indonesia’s 2023 Nickel Production Falls Short of Targets
In 2023, Indonesia reported production of 535,200 metric tons of nickel in ferronickel and 71,400 tons of nickel matte, falling short of its set targets. This production level marks a slight increase in ferronickel output by 3.6% from the previous year but falls below the anticipated target of 628,600 tons. Conversely, the nickel matte output experienced a 6% decrease and did not meet the government's target of 75,000 tons.
Indonesia, home to the largest nickel ore reserves globally, banned nickel ore exports in 2020 to boost domestic processing. Despite this, the country's production primarily consists of crude metals like ferronickel and nickel matte. Last year, several nickel smelter operators reported difficulties in securing ore for production, attributing this to delays in additional mining quota approvals. However, Bambang Suswantono, a senior official at the Energy and Mineral Resources Ministry, attributed the production shortfall to operational disruptions at some smelters, rather than delays in mining quota approvals.
Looking forward, the Indonesian government anticipates a rise in nickel ore output. With the shift in the mining production plan's validity from annual to a three-year span for streamlining approval processes, the ministry is still processing numerous mining quota approvals from various mineral companies. According to Tri Winarno, a director at the ministry, nickel ore output is projected to increase by about 5% to 10% in 2024, compared to the 193.5 million tons ore output recorded last year.
Indonesia's nickel production plays a significant role in the global market, especially with the increasing demand for nickel in various industries, including electric vehicle manufacturing. The country's production capabilities and policies significantly influence global nickel prices and supply chains.
