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| Vale S.A |
As global demand for nickel surges, driven primarily by its crucial role in the electric vehicle (EV) sector, securing a stable supply of nickel ore has become a top priority for smelters and investors. This comes amid supply disruptions caused by delayed approvals of Indonesian nickel mining work plans (RKABs), emphasizing the strategic shifts within the nickel supply chain.
Navigating Supply Challenges
Indonesia, the world’s largest nickel ore supplier, has faced significant delays in RKAB approvals, particularly impacting ore availability during the monsoon season from May to August. Uneven distribution of approvals across regions and companies has forced some smelters to reduce production, while others turned to alternative sources, triggering a surge in nickel ore imports.
Between January and October, Indonesia’s nickel ore imports skyrocketed 55 times compared to the previous year, with the Philippines supplying the majority of these imports. The sharp increase highlights the urgency for smelters to diversify supply sources and mitigate risks associated with Indonesia’s regulatory bottlenecks.
Strategic Adjustments and Future Outlook
To secure long-term nickel ore supplies, smelters are forming strategic partnerships with mining companies. Notable collaborations include Green Eco-Manufacture (GEM) teaming up with Merdeka Battery Material and engaging in a high-pressure acid leaching (HPAL) project with PT Vale Indonesia, a subsidiary of Vale S.A., the Brazilian mining giant. These joint ventures are essential for maintaining a steady ore supply, particularly as the EV market continues to expand.
Looking ahead, Indonesia has approved significant wet metric tonne (wmt) quotas to sustain demand. However, challenges persist, with unpredictable RKAB approval timelines and potential disruptions from new regulatory measures like the Simbara system, designed to enhance transparency and curb illegal mining. These evolving regulations will play a critical role in shaping the future of nickel supply chains and ensuring long-term industry stability.
