The Prabowo-Gibran government will encourage sustainable nickel downstreaming as an effort to achieve 8% economic growth. This is because Indonesia is the largest producer and owner of the world’s main nickel reserves.
Deputy Chair of the Prabowo-Gibran TKN Team who is also Deputy Chair of the DPR Energy Commission, Eddy Soeparno, revealed that of the total 130 million tonnes of world nickel reserves, 55 million tonnes or the equivalent of 42% are stored in Indonesia. In economic calculations, from nickel exports in 2023, Indonesia will receive IDR 106.59 trillion.
“Continuous nickel downstreaming is one of the main focuses in achieving 8% economic growth. “The challenge is how to ensure that the Indonesian government in the future carries out nickel downstreaming in a sustainable manner,” said Eddy Soeparno at the Indonesian DPR Building, Monday (30/9/2024).
Along with the ban on exports of raw nickel since January 1 2020, a mining product processing industry or nickel smelter has emerged in Indonesia. The Prabowo-Gibran team also claims that increasing smelter capacity has had a significant impact on increasing Indonesia’s nickel production and supply on the global market.
In 2023, Indonesia’s nickel supply will cover 55% of global supply and is expected to increase to 64% throughout 2024. Based on research by the Katadata Insight Center, in the next 5-10 years, nickel supply from Indonesia is expected to continue to increase and dominate.
According to Eddy, downstreaming of minerals, especially nickel, is not only strategic to increase added value, but is also a driving force for the energy transition through the electric vehicle ecosystem.
Also read: Faisal Basri reveals that nickel smugglers to China are people close to President Jokowi
“Indonesia has great potential to lead the global nickel downstream market, including batteries for electric vehicles. “This is in line with the world’s need for electric vehicles,” said Eddy.
However, Indonesia faces challenges in ensuring that the nickel downstream process and energy transition do not only focus on economic aspects, but also pay attention to ESG (Environmental, Social, Governance) principles. Especially in terms of using environmentally friendly energy, such as reducing dependence on coal-fired power plants.
Chief Content Officer & Co-Founder of Katadata, Heri Susanto, explained the results of KIC’s research that the surge in smelters was followed by the construction of a PLTU that prioritized energy from the Captive PLTU of 14.5 GW.
Also read: Vale Indonesia Slows Investment, Government Must Take Over
He said, this condition could make it difficult to target emissions reduction by 2030. Because of this, KIC proposed several recommendations so that nickel downstreaming can be carried out in a sustainable manner.
First, moratorium and control of nickel smelter investment. This is required to set supply and demand world nickel so that Indonesia can enjoy optimal added value and nickel reserves do not run out quickly.
Second, adopting renewable energy to reduce management emissions smelter. For this reason, the government needs to revise Presidential Decree 112 of 2022 which encourages the management of smelters using coal energy to be replaced with renewable energy.
Also read: Government Must Control Vale Shares to Spur Nickel Downstream
Third, invite investors who have a strong commitment to sustainability. Fourth, ensure post-mining land reclamation to overcome deforestation. Fifth, increase nickel downstreaming into nickel industrialization, such as the production of electric vehicle batteries.
Plt. Coaction Program Director Indra Sari Wardhani as a representative of the Clean Transition Coalition said that there needs to be a follow-up to the revision of Presidential Decree 112/2022 by formulating draft coal early retirement roadmap including safeguards. “Including making ESG a requirement for obtaining an investment permit, fulfilling biofuels and not allowing deforestation,” said Indra.
Responding to concerns about deforestation, the Prabowo-Gibran TKN Climate Policy Expert and Advisory Council, Ferry Latuhihin, said that Indonesia has extraordinary natural wealth. The carbon value could reach IDR 3,000 trillion-IDR 4,000 trillion. Ferry assessed that sustainable downstream efforts and also decarbonization efforts are not only due to global demands, but also national benefits.
“This green economy is not only to fulfill the Paris Agreement, but to be a source of income for our country, we must return to mother nature,” he concluded. (S-1)
#Nickel #downstreaming #Indonesia #pays #attention #ESG #principles
