Indonesia is at it again. As reported by Bloomberg, the country is considering the introduction of a tax on nickel exports before the end of the year. Already the world’s top dog in nickel production, Indonesia wants to own and profit from more of the supply chain. The proposed tax would target exports of nickel pig iron and ferronickel.
“We want to generate more jobs, more revenue, and more value from what we already have,” President Widodo said, noting that similar steps are being explored for other key exports like bauxite, copper, tin, and palm oil.
Indonesia holds around 25% of the world’s known nickel reserves. It’s no surprise, then, that the government sees big potential. According to previous statements from Jokowi, turning more of that metal into refined products at home could bring in as much as $35 billion in added value. Of course, there are trade-offs. A tax could slow overseas sales in the short term and push up global nickel prices, which have already climbed roughly 30% since late 2020.
Widodo also reaffirmed the country’s plan to roll out a carbon tax this year, one of the first of its kind in a developing Asian country. The tax, set at 30,000 rupiah (around $2) per ton of CO₂ emissions, will initially apply to coal-fired power plants. “Switching to renewables isn’t just about policy, it requires technology and money,” Jokowi noted. “We have the resources, but coal is still cheaper right now. That makes the transition challenging.” Yep, that’s pretty much the case in a lot of regions and commodities – you can have cheap or you can have clean. Only rarely can you have both.
Anthony Milewski
Chairman, Nickel 28 Capital
