Nickel is a key component in electric vehicle (EV) batteries. With demand for nickel cratering, Indonesia is going to have a very difficult time achieving its dream of becoming the globe’s leading supplier of this critical mineral. On Thursday, industry stakeholders brainstormed on what the demand for nickel will look like in the future. They warned that the anticipated drop in nickel demand this year could significantly derail Indonesia’s attempts to develop a domestic EV battery supply chain.
Now, as the global EV sector continues to develop, the market is leaning more and more towards alternative battery components – a reality that only adds to Indonesia’s challenges. China, one of the biggest markets for nickel, is in the midst of a historic economic downturn. These challenges are reducing the overall demand for nickel. This combination of factors leads to a dismal picture for Indonesia’s nickel sector.
Indonesia wants to build an integrated domestic supply chain for EV batteries. They intend to use their significant nickel reserves to catapult themselves toward that goal. The country’s goal is to benefit from its status as the world’s fourth-biggest producer of the battery metal nickel. Yet looking at the more recent picture, where demand is going down, these goals seem much farther out of reach.
Nickel is particularly important in making mixed hydroxide precipitate. Since this precipitate holds large quantities of nickel, it becomes critical for the production of EV batteries. As the industry is moving away from lithium ion towards other chemistries, this shift prompted fears that nickel would not be able to keep its crown as the top dog long term.
Dimas Ardian took this beautiful shot in Bali, Indonesia. It showcases lumps of mixed hydroxide precipitate loaded with nickel — an indication of the country’s plans for the burgeoning industry. This rosy picture is set against the realities of a rocky, unpredictable market environment that could well do in these hopes.