Critical Minerals and Energy Intelligence

Indonesia Investigates Illegal Nickel Mining

As a reminder of what can happen when one country produces close to half of the world’s nickel, ore prices in Indonesia are on a sharp upward climb, around 10% in just a few weeks, after the Attorney General launched a probe into illegal mining. As reported by Reuters, a top government official was recently arrested, and operations at a major mining site run by state-owned Aneka Tambang (Antam) were halted. Additionally, the government has reportedly put a freeze on issuing new mining quotas for nickel.

Reuters was told by a manager at a Chinese-owned smelter in Indonesia, who asked to stay anonymous, that “Everyone’s rushing to stockpile ore. The big players have driven prices up, and now smaller smelters are panicking. Many don’t have much ore left on hand, and if this drags on, some might have to shut down.”

With ore prices spiking, NPI prices have followed suit, as have export prices. Over in the Philippines, nickel ore prices are also getting a lift because any significant change in Indonesia is going to affect supply overall.

This is another timely reminder that the world shouldn’t get too comfortable with the lower nickel prices that we’ve seen this year. Nickel isn’t just listed as a critical metal by so many countries because of its importance to battery production, it’s also critical because global supply remains highly vulnerable to disruption. The mining industry and analysts have been saying this for some time. Until more nickel mines are developed in more regions of the world, this critical metal will remain extra critical.

Anthony Milewski

Chairman, Nickel 28 Capital

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