Indonesia’s nickel-related industries such as the production of stainless steel and battery materials are set to surpass the value of its second-biggest export earner, palm oil, in the next 10 to 15 years, its investment board chief said on Wednesday.
Southeast Asia’s biggest economy suffered a drop in foreign direct investment last year, but one area that attracted more overseas money was nickel processing, including a $4 billion Chinese-led project to produce battery-grade nickel chemicals to power electric vehicles (EVs).
Indonesia is also set to overtake Japan and India to become the world’s second-biggest producer of stainless steel behind China, when it reaches an industry ministry target of producing 4 million tonnes a year from its main production site at Morowali, on the island of Sulawesi.
“Our palm oil industry is worth about $18 to $20 billion in exports. I could see nickel and its derivatives, stainless steel, carbon steel, lithium-ion battery cells, surpassing that in the next 10 to 15 years,” Thomas Lembong, chief of the Indonesia Investment Coordinating Board, said in an interview as quoted by Reuters.
Indonesia’s large nickel laterite ore reserves - prized for nickel pig iron used in stainless steel production - are also a vital ingredient for lithium-ion batteries used to power EVs
Developers led by Chinese companies - including stainless steel-maker Tsingshan Holding Group, battery firm GEM Co Ltd and units of lithium battery maker Contemporary Amperex Technology Ltd (CATL) - started building a lithium battery project in Morowali in January.