Govt incentives accelerate nickel smelter development, 40 new projects expected
Tuesday, August 2 2022 - 01:22 PM WIB
Various government incentives have accelerated the development of nickel smelters in the country, with at least 40 smelters have been built so far this year, and more than 40 new projects are expected in the future, commodity research company PT Indeks Komoditas Indonesia (IKI) said in its latest Indonesia Nickel Report (INR).
The report said the government has provided various incentives such as tax allowance, tax holiday, zero import tax, bonded zone facility, and assistance in land acquisition and permitting process, in a bid to accelerate the development of domestic nickel downstream industry to generate greater value from the country’s huge nickel reserves.
From only five smelters operating in 2014, the number has grown to at least 40 smelters, consisting of 36 smelters producing ferronickel or NPI, two smelters producing nickel oxide (MHP), one smelter producing nickel hydroxide, and four smelters producing nickel matte, the report said.
“We estimated that there are more than 40 nickel smelter projects to be built in the future,” the INR said.
North Maluku Province will see the development of 13 ferronickel/NPI smelter projects and two high pressure acid leaching (HPAL) smelter projects belonging to Eramet and LG, the report said
In Central Sulawesi, there are plans to build fourteen new smelters consisting of nine ferronickel/NPI and five HPAL smelters, while South Sulawesi plans to build sixteen smelters consisting of twelve ferronickel and four HPAL projects.
IKI also said that nickel smelter projects have begun to move to other provinces, especially to Kalimantan as several coal miners have started to diversify into the nickel industry to anticipate the sunset in the coal business due to the global energy transition program. Bumi Resources and Indika have already expressed interest in nickel batteries, and Jhonlin is planning to build HPAL at its industrial area in Batulicin. The MMS Group has started construction of a nickel smelter in Kutai Kartanegara, and MIP also mentioned plans to build a pyrometallurgical smelter in the future.
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