Indonesia has some energy and mines to thank for, including nickel. In fact, Indonesia has the largest "treasure" nickel mine of any country. Indonesia has 72m tonnes of nickel reserves. Total reserves account for 52% of the world's total nickel reserves, amounting to 139,419,000 tons of nickel. The data are based on data from the 2020 Ministry of Energy and Mines booklet entitled "Nickel Mine Investment Opportunities in Indonesia", which is the result of processing data by the United States Geological Survey (USGS) in January 2020 and the Geological Agency in 2019.
Large domestic nickel reserves have been one of the triggers for foreign companies to focus on Indonesian nickel mines, including investing in Indonesia. As far as prices are concerned, the future price of nickel is thought to be very dependent on Indonesia. Price fluctuations will depend on supply and demand. While nickel prices fell this week, they still average about $19,000 a ton.
On Thursday, August 19, 2021, Steven Brown, an independent consultant to the mining industry, said that global nickel demand is expected to increase in the future due to the transition to new renewable energy sources, such as increased demand for electric vehicles, and new renewable power plants that require nickel feedstock.
On the supply side, though, world nickel production has increased only in Indonesia. And supply from outside Indonesia is experiencing a downward trend. So there is no question whether the world's nickel supply is dependent on Indonesia's supply.
Steven Brown claims that there are a lot of predictions related to the price and I don't think it will go up very far from here because it still depends on supply and demand. Obviously, there will be a big increase in demand because of electric cars and so on, but it also looks like supply is balanced based on the development in Indonesia. Supply can keep up with demand. But it all depends on Indonesia. So outside Of Indonesia, there is absolutely no keeping up with demand. So much depends on one Indonesia.
Steven Brown explains that the world is now dependent on Indonesia for nickel supplies as the country is building a number of nickel smelter projects, especially using the announced high pressure acid Leaching (HPAL) technology. This high pressure acid leaching technology is the product of a smelter. It can be mixed sulfide precipitate (MSP) or mixed hydroxide precipitate (MHP), which can then be processed into nickel sulfate, which is a component of lithium batteries. In the first half of 2021, Indonesia's nickel supply grew only by 320,000 tons, or 140 percent, compared to the same period in 2020. This amount does not include nickel production by PT Vale Indonesia.
Global nickel supply outside Indonesia was actually 265,000 tonnes, or 26 per cent, lower than in the first half of 2020. This shows that the world nickel supply is only increasing from Indonesia, so there is no doubt that the world nickel supply is dependent on Korea.
Steven Brown says it's truly amazing. Total nickel production increased only in Indonesia. The increase in nickel supply comes mainly from smelters in nickel industrial zones such as Morowali, PT Indonesia Morowali (IMIP) in central Sulawesi, and then Maluku Utara in North, Halmahera Tengah, PT Weda Bay Industrial Park (IWIP) in Weda Bay, North Malugu, South Hamahera, Harita Group in Pulau Obi, In southeast sulawesi, Konawe, there is PTVirtue Dragon Nickel Industry (VDNI).
Steven Brown notes that many foreign companies are interested in mining or investing in Nickel projects in Indonesia because, in addition to Indonesia's large nickel reserves, the quality and cost of production is much cheaper than abroad. Abroad, nickel production is now more difficult because it requires digging deeper, not in as much quantity as in Indonesia, and costs more. Because Indonesia's ores are more accessible and of better quality than those in other countries; And in a country without sulphide ores, it's already hard to find, so the deeper it gets, the deeper it gets; If it's sulphide, it's underground, so it's more expensive to develop sulphide ores. Indonesia has the largest nickel reserves and its economy is building better, cheaper and faster. Investment in Indonesia's nickel industry has continued to rise since 2014, when the country banned exports of nickel ore. As things stand, nickel investment in Indonesia will remain advanced, or at least not slow down. So, since 2014, investment in extraction has continued, and seems to be continuing to do so.
Whether nickel is on the verge of a supercycle is a subject of much debate, as some say it is, while others say it is far from it. The reason is that the world's highest nickel price, which once hit $50,000 a tonne, is now just under $20,000. The nickel supercycle was previously triggered by China's industrial development, but now it is more about promoting a transition to renewable energy sources, such as increased use of electric vehicles and new renewable power plants. This energy conversion will consume a lot of nickel, so the demand for nickel will certainly continue to increase in the future.
So far, the supply of nickel is still in balance with demand, even though there are two groups in the future, some who think future demand exceeds supply and others who think supply and demand are in balance, so it is debatable whether it wants a supercycle.
