Nickel: Indonesia confirms talks with Tesla
roskill.com
Posted 9th February 2021 in ?Industry news.
By Jack Anderson
An Indonesian official has revealed that the government will begin early talks with Tesla over a potential investment in the development of Li-ion batteries in the country. The news of an investment proposal was revealed by the country’s deputy head for investment and mining coordination, Septian Hario Seto.
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The development potentially represents another boost for Indonesia, which has been strengthening its position in the Li-ion battery supply chain through several large international investments. At the end of 2020, LG Chem signed a memorandum of understanding for an EV battery manufacturing deal with Indonesia reportedly worth US$9.8Bn. The country now looks well poised to make the most of its abundant nickel reserves. The news of a potential tie up with Tesla follows an announcement last week by the Indonesian government that it would not permit deep sea tailings placement (DSTP) as a form of tailings disposal at any of the battery-grade intermediate projects under construction. These projects must subsequently find alternative methods of safe on-land storage methods. This is perhaps in response to pressure from western OEMs including Tesla, which place ESG high up their raw material procurement criteria. Last July in a post-earnings call, Tesla boss Elon Musk, pleaded for nickel that has been sourced “efficiently and in an environmentally sensitive way.”
As well as targeting the Li-ion battery market, Indonesia has also been successful in attracting investment for a fully integrated stainless steel supply chain. As part of this, it is now the world’s leading producer of nickel pig iron (NPI) which is used as a raw material in stainless steel production. NPI that is not being consumed at operations domestically is being increasingly exported to Chinese stainless steel producers. Chinese imports of NPI from Indonesia doubled y-o-y in 2020 as expansions from greenfield and brownfield capacity in Indonesia were brought online.
Given the investment figures being reported, Indonesia’s rapid rise in producing nickel products for the stainless steel industry looks likely to be replicated for the battery sector. The country’s gamble on a severe export trade policy for nickel ore now looks to be paying off and 2021 is shaping up to be another big year in the development of its nickel industry.
Roskill’s nickel report for the EU Commission’s JRC: Study on future demand and supply security of nickel for electric vehicle batteries is available now. Roskill analysed the EU’s nickel requirements for EVs within the context of the global market over a twenty-year forecast horizon to 2040.
Roskill’s NEW Nickel: Outlook to 2030 report, 17th Edition, will be published in April, providing a ten-year forecast for the nickel industry, including analysis on future nickel supply and demand outlook for the stainless steel and other nickel sectors.
Roskill’s NEW Nickel Sulphate: Outlook to 2030 report, 4th Edition, will be published in April, providing a ten-year forecast for the nickel sulphate industry, including deep-dive analysis on future feedstock supply for battery grade nickel and the EV demand outlook.
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