Indonesia sees surge in nickel-related exports after ore export ban

Wuling Motors Holdings

04/09/2019 07:35

By Bernadette Christina
    JAKARTA, Sept 4 (Reuters) - Indonesia's ban on nickel ore
exports could boost the country's earnings from the metal
five-fold in the next five years through growth in industries
such as stainless steel and battery materials, a minister said
on Wednesday.
    In a move that threatens to cut global supply, the world's
top nickel miner said this week it would stop nickel ore exports
from Jan. 1, 2020, two years earlier than initially indicated,
to promote more domestic processing.  urn:newsml:reuters.com:*:nL3N25T1H9
    Luhut Pandjaitan, a coordinating minister overseeing mining,
said nickel-related export earnings will surge from last year's
$5.8 billion, with investment in processing pouring into the
nickel-rich region of Morowali in Central Sulawesi province.
    "Now (exports) may be at $7.8 billion, in 2020 they will
reach $12 billion and in 2024 they may exceed $30 billion,
including exports of lithium batteries," Pandjaitan said at
Indonesia's first electric car show.
    Indonesian authorities have expressed hopes that
nickel-related industries such as the production of stainless
steel and battery materials will grow to become one of the
country's main industries, overshadowing current top commodity
palm oil in 10 to 15 years.  urn:newsml:reuters.com:*:nL3N21E1ZS
    Pandjaitan said the current investment pipeline showed that
as much as $30 billion could be spent on nickel processing in
the Morowali region to 2024.
    That includes a $4 billion lithium battery project by
several companies, including Contemporary Amperex Technology Co
Ltd (CATL)  300750.SZ  which supplies batteries for carmakers
like Volkswagen, Mercedes and Tesla, the minister said, noting
this will either start at the end of the year or early 2020.
    Indonesia aims to have 36 nickel smelters by 2022 with a
total ore processing capacity of 81 million tonnes per year.
    Southeast Asia's largest economy also aspires to become an
electric vehicle (EV) hub for Asia and beyond with a target to
start EV production in 2022. The government has laid out tax
incentives to encourage investment in the sector.  urn:newsml:reuters.com:*:nL4N255133
    Automotive companies like Japan's Toyota Motor Corp
 7203.T , which has a plan to invest $2 billion in EV production
in Indonesia according to authorities, Mitsubishi Motors Corp
 7211.T , China's Wuling Motors Holding  0305.HK  and Dongfeng
Sokon Indonesian unit are displaying their EV prototypes in the
car show.  urn:newsml:reuters.com:*:nL4N23Y3DF

 (Reporting by Bernadette Christina; writing by Gayatri Suroyo;
editing by Richard Pullin)
 ((gayatri.suroyo@thomsonreuters.com; +622129927609; Reuters
Messaging: gayatri.suroyo.thomsonreuters.com@reuters.net))