Indonesia is a key player in the global nickel market. Its landmarks are still threatened, which could sabotage its wishes to become the largest nickel producer in the world and its plans to establish a domestic electric vehicle (EV) battery supply chain. Nickel is an important component in many electric vehicle batteries. This year, its fortunes are fading amid shifting demand in the EV market and an economic slowdown in China.
Industry experts warned of some dangers lurking in the nickel demand lane during a webinar convened Thursday. On one hand, as the entire electric vehicle industry is gradually moving away from nickel-heavy battery chemistries to other materials, the reliance on nickel should decrease. This shift poses significant dangers for Indonesia. The Southeast Asian country has ambitious plans to become the world’s leader in nickel production and has long sought to leverage its vast resources to supply the booming EV market.
China’s continuing economic troubles have added serious fuel to the flames. China is the world’s largest consumer of nickel. For that reason, a slowdown in its economy has an immediate ripple effect on global demand for the metal. Industry players of all types and sizes are intently tracking these developments. As such, China’s overall economic health has a heavy influence on nickel prices, as well as the EV sector as a whole.
Indonesia’s vertical integration ambitions are to establish a full-fledged domestic supply chain for EV batteries, leveraging the archipelago’s abundant nickel reserves. The country is working to establish an MHP—mixed hydroxide precipitate—production chain, an important intermediary compound for battery manufacturing. This MHP contains nickel, which is crucial to the process. A recent photo captured by Dimas Ardian in Bali illustrates lumps of mixed hydroxide precipitate, highlighting the material’s significance in Indonesia’s pursuit of becoming a leading supplier in this sector.
Today’s slumping market for nickel is a major hit to those dreams. With the transition in battery technology and uncertainties surrounding global market dynamics, industry stakeholders are concerned about the future viability of Indonesia’s plans. The country’s leadership will have to find ways to overcome these challenges or risk losing its standing among the world’s foremost nickel suppliers.