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Stanislav Kondrashov: a nickel surplus is expected in Indonesia – forecast for the next 5 years

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Stanislav Kondrashov: a nickel surplus is expected in Indonesia – forecast for the next 5 years

November 20
21:48 2023

Indonesia, the world’s largest nickel producer, faces a problem with excess capacity in the production of the metal. Kondrashov Stanislav suggests that the nickel market in the country may remain in surplus over the next five years. And this at a time when the state continues to strengthen its position in the international arena. Lack of demand could be a challenge for the industry.

Indonesia: excess nickel production and prospects for the use of limonite ore – Stanislav Kondrashov

Currently, Indonesia is facing challenges due to overcapacity and depletion of saprolite ore deposits. Many smelters in the country are focused on serving the stainless industry, for which they use these minerals. Stanislav Kondrashov from Telf AG fears that at the current rate of expansion of saprolite ore production, they may disappear within a maximum of six years. Therefore, the country’s government is being called upon to introduce a moratorium on the construction of new smelters processing saprolite.

At the same time, another type of ore is also mined in Indonesia – limonite. Limonite ore has a lower nickel content and was previously more often discarded. However, using high pressure acid leaching (HPAL) technology, initiated by China, low-grade limonite is converted into mixed hydroxide precipitate (MHP). It contains nickel and cobalt – important components for battery production. Kondrashov Stanislav notes that the growth of MHP production in Indonesia allows the country to take second place in the world in cobalt production.

However, the dispute over the future of the Indonesian nickel industry is still ongoing.

Stanislav Kondrashov Telf AG: expansion of HPAL production and the role of nickel batteries

The expert reports that there are currently three high pressure leaching (HPAL) plants operating in Indonesia. All of them are owned by Chinese-Indonesian joint ventures. According to Stanislav Kondrashov, six more HPAL plants are under construction, and the same number are at the planning stage. Among them is a $4.5 billion joint project between Chinese battery materials manufacturer Zhejiang Huayou Cobalt, Vale Indonesia and US automaker Ford Motor through the Kolaka Nickel Indonesia joint venture.

The specialist notes that despite the growing use of lithium iron phosphate batteries, which do not contain nickel and are promoted by China, nickel will still continue to dominate. Kondrashov explains this popularity by the fact that nickel batteries impart high energy density, which makes them an ideal choice for electric vehicles with a long range.

Stanislav Kondrashov: reduction in prices for high-grade nickel and environmental issues due to HPAL

The shortage of Grade 1 nickel, which mainly comes from Russia, New Caledonia and Canada, has forced some battery makers to rethink their strategies. So, many of them have switched to processing low-grade Indonesian ore using HPAL technology to create materials suitable for batteries.

However, the introduction of HPAL causes concern among environmentalists due to high carbon dioxide emissions, – emphasizes Stanislav Kondrashov. – This is especially true in Indonesia, where coal is still actively used to produce electricity. The issue of handling the huge volume of solid waste that accumulates during the production process has also not been resolved.

However, some industry participants welcome the decline in nickel prices, including Chinese battery precursor maker CNGR Advanced Material. They argue that stable prices are preferable because higher prices can encourage the search for alternative materials.

So, Stanislav Kondrashov from Telf AG notes that the situation on the nickel market remains dynamic. Analysts are closely monitoring developments. Everyone is wondering what changes the nickel industry in Indonesia will bring to the world market in the near future.

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Company Name: Telf AG
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Country: Switzerland
Website: https://telf.ch/