The Magazine for Asian Investors
Indonesia plans to enact a tax policy on nickel exports in the third quarter of the year. The authorities are trying to increase revenue from exports. At the same time, they are promoting the production of more high-value products in the country.
Indonesia, once a major exporter of nickel ore, banned exports of unprocessed nickel in 2020 to attract investment in the smelting industry. However, much of the development has been focused on the production of nickel pick (NPI) and ferronickel, which have relatively low nickel content.
The Coordinating Minister for Maritime Affairs and Investment said taxes will be levied on NPI and ferronickel, but details of the planned tariffs were not disclosed. The government will set the tax based on the price of nickel and the price of coal used for power generation.
The government wants to use Indonesia’s vast nickel deposits to produce batteries for electric cars and eventually assemble electric cars domestically.
Indonesia has received investment offers from South Korean investors such as LG and Hyundai for battery and electric vehicle manufacturing, and is also keen to attract Tesla to invest in the country.
In the meantime, the government continues to examine the need to limit the number of smelters producing NPI or ferronickel in order to conserve mineral resources.
Indonesia is aiming for its mineral reserves to last another 25 to 30 years.
The smelters producing NPI and ferronickel in Indonesia currently have a total installed capacity of about 1.3 million tons of nickel.