Bans on exports of raw mineral ores are driving an expansion of domestic processing capacity for nickel, coal and bauxite in Indonesia.
This comes as global demand for electric vehicle (EV) batteries will increase demand in Indonesia’s nickel industry – as well as demand for other minerals. indicates that the annual value of Indonesia’s critical minerals production will likely exceed US$30 billion by 2030.
Increased demand and downstream processing in Indonesia will create fresh opportunities for Australian companies in the mining equipment, technology and services (METS) sector.
Indonesia is already the and the second largest producer of tin.
Ore export bans and downstream processing
Mining is a key contributor to Indonesia’s GDP. Since 2014, the Indonesian Government has banned exports of certain raw mineral ores to encourage onshore processing.
in June 2023. This should accelerate growth in bauxite processing facilities for alumina. In Indonesia, there is a , according to analysts.
There are 8 bauxite smelters under construction in Indonesia, with a further 4 planned
Nickel production is rising steeply
Processed nickel exports rose from US$1 billion in 2015 to US$30 billion in 2022. Indonesia is projected to account for half of the world’s increase in nickel production to 2025.
Production is driven by fast-growing global demand. The global electric vehicle (EV) industry, for example, is expected to become increasingly reliant on Indonesia’s vast nickel reserves.
Indonesia is seeking to become a hub for EV battery production. There are and facilities for anode material production.
Downstream diversification for coal
Indonesian targets call for 695 million tonnes of coal production in 2023 and 518 million tonnes of exports. The country also in multiple coal-related areas, including:
- coal liquefaction
- quality enhancement
- gasification
- coke manufacturing
- underground coal gasification
- briquette manufacturing
- coal-water mixture production.
Opportunities for METS exporters
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) gives Australian businesses . These include tariff-free access for 99% of Australian goods exports and greater certainty around investments into Indonesia.
Australian METS companies can leverage our reputation for high-quality METS products and services. Specifically, Australian METS companies are well-placed to meet growing demand for technology and services that improve productivity, efficiency and safety.
There will be more opportunities for Australian METS companies to access Indonesian projects as the country develops greater downstream refining and processing capabilities.
Australian METS companies can also help local companies meet that will be a requirement to sell into global supply chains.
