Indonesia's tightening of nickel smelter licenses may boost prices and efficiency

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The Association of Indonesian Nickel Miners (APNI) believes that Indonesia's restrictions on investment in new nickel smelters and the issuance of industrial operating licenses (IUI) are expected to drive up global nickel prices, but there is uncertainty, and companies need to be prepared to deal with prices that do not rise as expected.Members of APNI's advisory board noted that Indonesia's smelter moratorium policy could boost global nickel prices, although there are no absolute guarantees due to a number of factors.

Firms should include Indonesian policy as a triggering eventRoadmap, Analysis and Industry Strategy 2025-2030programMedium. The current nickel price of around $15,075.33 per tonne is down sharply from the all-time high of over $100,000 in March 2022, but this policy will help companies operate more efficiently and drive investment. The government's streamlining of the risk-based business licensing process in accordance with government regulations has four potential positive impacts on the industry.

firstlyLow-risk smeltersThe second is to reduce the administrative burden on businesses, allowing them to focus on operations and innovation; and the third is to use theClean and innovative technologiescompanies may be more likely to be licensed, attracting more investment in innovation; fourthly, with clearer regulations and easy-to-understand processes, companies can enjoy a betterLegal certaintyThe

In addition, the Ministry of Industry has confirmed that the issuance of IUIs for independent nickel smelters (not integrated with mines) has been tightened as required, although some flexibility is still given to smelters that are already in the construction phase and plan to produce intermediate products. As of March 2024, Indonesia has44 operating nickel smeltersThe number of projects under construction is 19 and seven are at the feasibility study stage.

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