Analysis of Indonesian nickel industry chain


With the deepening of the enterprise's layout of the nickel industry chain in Indonesia, Indonesia's important position in the nickel market is gradually clear. This paper will introduce the development of nickel market in Indonesia from nickel ore, nickel iron, wet process project and stainless steel project.

Nickel ore market

Indonesia is located at the intersection of the Pacific Ocean and the Indian Ocean, across the equator, land area of 1919,000 square kilometers, ocean area of 3.16 million square kilometers (excluding special economic zone), by tens of thousands of islands, is the world's largest archipelago country.

Resource-rich Indonesia and China are highly complementary in terms of economy. Indonesia can provide the mineral resources such as oil, natural gas, copper, aluminum, nickel and tin that China needs. Chinese investment can also drive the local economic development of Indonesia. Rich mineral resources and low energy prices have attracted many Chinese nonferrous metal companies to invest in Indonesia, with nickel being the most prominent investment and having a far-reaching impact on the global nickel market. The news that Indonesia banned the export of low grade ore caused the nickel price to rise sharply continuously.

Nickel is a relatively abundant metal on earth. Nickel ore is divided into two types, one is laterite nickel ore, the other is sulfide ore, corresponding components are nickel oxide and nickel sulfide, global reserves accounted for 60% and 40% respectively. Most of the laterite nickel deposits are open-pit mines, which are easy to mine. However, due to the low grade and complex processing technology, the major nickel deposits mined in the world are sulphide deposits. From the perspective of proportion, the annual output of sulphide ore and laterite nickel is about 55∶45. Most of the copper-nickel sulfide deposits found in the world have been developed and utilized, while the development of laterite nickel is just beginning and will be the focus of future development. Indonesia's nickel ore is laterite nickel ore. Laterite nickel ore is oxide ore, mainly distributed in equatorial areas, because it contains more iron, color shows the red of iron oxide, so called laterite nickel ore.

Indonesian nickel resources are concentrated in sulawesi and nearby islands. Sulawesi island's nickel resources account for about 80% of Indonesia's total nickel resources. Sulawesi is a large island in central Indonesia with a total land area of 174,600 square kilometers. Sulawesi is shaped like a capital K, commonly known locally as the great K island. The island is more mountain deep valley, less plain, mountain area than significant, Indonesia castle peak base is located on the island.


According to the United States geological survey (USGS), more than 130 million tons of nickel resources with more than 1 percent have been identified worldwide in 2018, with 60 percent of them in laterite. The number of new sulfide deposits found in traditional mining areas decreased, but large amounts of nickel resources were found in manganese crusts and nodules on the ocean floor. Global nickel reserves are relatively concentrated, with the top 10 countries accounting for 95%. Due to increased demand for nickel stainless steel in recent years, Indonesia nickel investment increase, according to the USGS data show that in 2018 Indonesia nickel reserves soared from 4.5 million tons to 21 million tons, became the most rich countries, nickel resource accounts for about 24% of global reserves, followed by Australia, Brazil, Russia, new caledonia, Cuba, the Philippines and other countries.


In 2018, the global output of nickel ore was 2.18 million tons, an increase of about 2% year on year. Among them, the top six nickel producers accounted for 72% of the world's total output, including Indonesia, the Philippines, Russia, Canada, new caledonia and Australia. According to USGS data, Indonesia's nickel production reached 560,000 tons in 2018, ranking first in the world, up 60% and accounting for about 24% of global production.


Indonesia exported 22 million tons of nickel ore in 2018, up 450 percent year on year, according to the ministry of energy. The big change comes from a change in Indonesian mining policy. Setting aside our Indonesia mining policy in recent years is divided into four stages: the first phase is 2014 years ago, the second phase is a complete ban on stage in 2014-2017, the third stage is 2017-2019 to allow low grade ore export stage, the fourth stage is low grade ore after 2020 was banned exports phase (full stop nickel exports) again.

The first stage

Indonesia exported large quantities of laterite before it banned exports in 2014. By 2013, the export volume reached a peak of over 60 million tons. In 2014, Indonesia's ban on export of nickel and iron led to the large-scale development of nickel and iron projects. Before 2014, the total amount of nickel and iron exported from Indonesia was less than 100,000 tons, but in 2017, the amount exceeded 1 million tons.

The second stage

The ban comes after Indonesia banned nickel exports in 2014. At that time, the Indonesian government hoped to encourage local enterprises to conduct smelting and processing by changing the way of simply exporting resources, so as to increase the added value of products and promote employment and economic growth on the one hand. Therefore, the Indonesian government announced a total ban on the export of raw ore from January 12, 2014. Raw ore must be smelted or refined locally before it can be exported.

In mid-2014, nickel prices rose to more than $2,000 a ton. However, the ban on mining in that year did not lead to a continuous rise in the price of nickel. After Indonesia banned the export of raw ore in January 2014, the laterite nickel ore exported by the Philippines to China and the stock hoarding in the early stage made up the gap. The expected shortfall did not materialise, imports of nickel continued and prices fell again in mid-2014.

The third stage

On January 12, 2017, Indonesia resumed the export of nickel ore. According to the 2017 mining mining laws and regulations, Indonesia is scheduled to start on January 12, 2022, suspend exports from the raw ore, after will give the miners five years to build smelter at home, but allow the export of mine must meet two conditions: one is 30% of the smelting capacity must be used for processing low grade ore, the rest can be used for export; Second, the smelting project must be completed within 5 years, and the construction progress must be checked by the Indonesian government every 6 months, otherwise the project will be disqualified.

The fourth stage

From January 1, 2020, exports of nickel ore containing less than 1.7 percent will no longer be allowed, a total ban.

Nickel iron market

At present, China and Indonesia use laterite nickel ore to produce nickel pig iron, and Indonesia's NPI has a cost advantage, so its production capacity grows rapidly. If the ban leads to the high import price of nickel ore in China, the high-cost nickel pig iron production capacity in China may be replaced by the production capacity in Indonesia. Therefore, it is expected that the production of nickel iron will decrease in China and rise in Indonesia next year. China's NPI production is expected to drop below 500,000 tons in 2020, while Indonesia's NPI production will rise to 550,000 tons.

Because of nickel resources mainly concentrated in sulawesi in Indonesia, so most of Indonesia NPI factory set up in this area, which, in sulawesi province of castle peak group, new hualian, as well as possible in the future production of hengshun the sheng, yinhai universal, in March 2019, the province of nickel pig iron production accounts for about 64% of Indonesia nickel pig iron production in March. In addition, there are delong and Ifishdeco in the southeast sulawesi province, which accounted for about 24% of Indonesia's nickel pig iron production in March.

The remaining major production areas are northern maluku, southern sulawesi, maluku and banten provinces. There are emerging cast pipes and jinchuan projects expected to be put into production this year in northern maluku province. WedaBay industrial park, with the participation of aoyama group, is also in northern maluku province, accounting for about 9% of Indonesia's nickel pig iron production in March. Huadi industry in south sulawesi province; There are vibration stone projects in maluku province; Bandan province has two indonesian-backed enterprises: Indoferro and century metallurgy.

Stainless steel market

When it comes to the nickel-iron market, it is necessary to mention the stainless steel market in Indonesia. Because nickel iron as the upstream supporting products of stainless steel, and stainless steel is closely related.

In the nickel iron stainless steel industry development is the fastest qingshan group. Qingshan industrial park is the foreign mining project with the fastest capital, the fastest construction speed and the most fruitful results after Indonesia issued the ban on mining. Covering an area of more than 1,300 hectares, the park is mainly equipped with a thermal power plant with a total capacity of over 1,000 megawatts, a 100,000-ton dock, an airstrip and a living area with a total construction area of about 200,000 square meters, with a total investment of us $5 billion.

Huaqing co., ltd. and qingchuang international co., LTD., wuyuan holding co., LTD., IMIP, LONGSINCERE sulawesi island project with a total investment of us $1.28 billion. The production scale of the project is 60,000 tons of nickel metal per year, and the construction of the first phase is 30,000 tons of nickel metal per year. (From CCMN)