Indonesia's Ministry of Maritime and Investment Coordination (Kemenko Marves) has confirmed that Indonesia's export duties on nickel downstream intermediate products (NPI) will take effect this year.
The NPI export tax is a directive of President Jokowi to increase the value of mineral sales of downstream minerals. NPI is a semi-finished product made from processed nickel ore, a commodity commonly used to make stainless steel.
"It should have been completed this year and we are still discussing it with relevant ministries and agencies," Tubagus Nugraha, assistant deputy for mining at the Maritime Coordination Ministry, said during a recent meeting at Jakarta's Grand Kemang Hotel.
In addition to processing nickel ore into semi-finished products, the government is also preparing to turn nickel ore into one of the raw materials for electric vehicle batteries.
According to Tubagus, the NPI commodity can be processed into high-ice Nickel called Nickel Matte, which contains 78 percent nickel. This value is higher than that of ferronickel, which contains only 25% to 45% nickel. "From high-ice nickel, it can be converted into nickel sulfate, cobalt sulfate, precursor, battery cathode material," Tubagus said.
Indonesia's nickel exports grew rapidly in the first half of this year, according to a report by the Central Bureau of Statistics (BPS).
Previously, as of the first half of 2021, the national nickel export volume was only 44,100 tons, with an export value of $436.8 million.
In the first half of 2022, exports surged to 297,76 tons, with exports worth $2.45 billion.
On an annual basis, Indonesia's nickel exports in the first half of 2022 were up about 574% year on year, while exports were up 462% year on year.
However, BPS did not specify what type of refined nickel was exported during the period, and the Indonesian government has banned the export of unprocessed nickel ore since early January 2020.
The ban was later brought to the World Trade Organisation by the EU, and the investigation is continuing.
"In accordance with the timetable adopted so far and in consultation with the parties concerned, the panel is expected to issue its final report to the parties in the last quarter of 2022," the official WTO document said.
As previously reported, Jokowi said a tax on nickel exports was possible because it would raise revenue and promote higher value local manufacturing.
With the tax, Jokowi also hopes to create more jobs for Indonesians. "That is why we want to implement policies such as banning bauxite, copper, tin and crude palm oil. But we are not closed, we are open, "Jokowi was quoted as saying. The president did not specify when or how much nickel exports would be taxed, but a senior government official said in early August that the government planned to introduce a nickel export tax policy in the third quarter of this year.
