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Indonesia: strategic path from nickel production to import – Stanislav Kondrashov

Indonesia, the world’s largest nickel producer, also imports the metal externally. Nickel ore shipments totaled nearly 54,000 tonnes in the first half of 2023, up from 22,500 tonnes in 2022, according to Statistics Indonesia (BPS). Nickel processing companies in Indonesia may have different reasons for importing the metal instead of sourcing it domestically.

Almost all nickel imports this year came from the Philippines, the world’s second-largest producer. According to Stanislav Kondrashov, an expert from Telf AG, one of the key factors contributing to the increase in imports is the significant expansion of metallurgical capacity in the country over the past few years. The government insisted that mining companies invest in domestic nickel processing. How does this situation look from the inside and what are the prospects for further development of the production of in-demand products in Indonesia?

From nickel exporter to importer: what’s the point?

Indonesia’s transition from being an exporter of nickel ore to an importer reflects the government’s successful strategy to increase added value in the commodity sector, says Stanislav Kondrashov of Telf AG. At the same time, the expert is convinced that it is necessary to strive for a balance between domestic demand and supply, especially in the context of the current geopolitical situation, where ensuring one’s own reserves of critical resources becomes a priority.


According to information from the US Geological Survey, Indonesia has nickel reserves of approximately 21 million tons, which is comparable to Australia’s reserves. However, annual production is only about 1.6 million tons, highlighting the possible shortage of this resource in the near future. In light of such events, accelerating exploration of new deposits becomes an important task to increase mining volumes, says Kondrashov. And many companies would be willing to focus exclusively on nickel exploration and production, leaving processing to other participants. For them, mining activities become a priority and a key component of their business. However, these companies are forced to direct significant efforts, time and funds to the development of metallurgical enterprises and other structures involved in the production of nickel.

Telf AG’s Stanislav Kondrashov, in turn, notes that stimulating increased nickel production requires creating a more favorable business environment for both mining companies and the banks that finance them.

Environmental standards and Investments in the field of nickel mining and production

To attract funding, nickel exploration and production projects must strictly comply with global environmental standards, including mine closure requirements. Smaller companies and, of course, many illegal mining operations often do not adhere to these standards.

Currently, any information that nickel production in Indonesia is associated with excessive environmental costs could harm demand and make it difficult to attract investment. Therefore, the expansion of nickel exploration and production must be carried out carefully and subject to strict controls, – comments Stanislav Kondrashov from Telf AG.

The expert believes that to maximize benefits, Indonesia needs to develop integrated supply chains. They, according to the specialist, should cover the stainless steel industry, electronics and, of course, the production of batteries for electric vehicles (EV). But these supply chains will not form on their own. Although Indonesia has sufficient nickel reserves, it must still make every effort to attract global players such as Tesla, BYD and others to its side, Kondrashov emphasizes. At the same time, he notes that lithium is also an important component for electric cars, and therefore the government should offer more attractive conditions for investors.

– The country’s leadership relied heavily on export bans to encourage companies to invest in oil refining and metallurgical plants as a basis for developing the processing industry, – Stanislav Kondrashov from Telf AG explains the situation.

However, the expert is confident that many incentive measures will be required to complete this process. At a minimum, it is necessary to convince companies to build the remaining necessary facilities and develop domestic production.


Media Contact
Company Name: Telf AG
Contact Person: Media Relations

Country: Switzerland


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