More and more investments in the nickel sector

Indonesia's nickel processing is growing unabated: At the end of March 2023, the US automobile manufacturer Ford announced that it would invest 4.5 billion US dollars in a joint venture with China's Zhejiang Huayou Cobalt and the mining group Vale Indonesia. Specifically, it is a plant for high-pressure acid leaching (HPAL - High Pressure Acid Leaching) in the province of Southeast Sulawesi. At the end of January 2023, BASF announced that it was examining the construction of a $2.6 billion nickel processing plant in Sulawesi together with the French company Eramet. Indonesia is in negotiations with the electric car manufacturer Tesla about investments in the nickel sector. Volkswagen is also considering getting involved. 

Indonesia is the world's largest producer of nickel, which is used in electric car batteries. More than 20 nickel smelters have been created so far, and many more are being built. The nickel supply chain is largely in Chinese hands. Indonesia's export of nickel products has increased eightfold in the past two years. 

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Source: UN Comtrade 2022; Indonesia Statistics Agency 2022 

For 2022, the Indonesian Ministry of Investment had announced an increase in foreign direct investment (FDI) by almost 50 percent. The main reason for this is the further processing of nickel. The economy of the nickel province of Central Sulawesi grew by 15.1 percent in 2022 (Indonesia as a whole: +5.3 percent). There is now an urgent need to build transmission lines there in order to meet the increasing demand for electricity.