Nickel and nickel sulphate: Coronavirus likely to delay Indonesian nickel projects

Port in Indonesia

The Indonesian coordinating minister, who oversees maritime resources and investment affairs, has revealed that the Covid-19 coronavirus is likely to impact development of nickel projects planned in the country.

The Minister Lahut Pandjaitan told reporters that those Indonesian projects located in Morowali and Konawe on Sulawesi, and in Weda Bay in North Maluku, will be impacted by measures taken in China to control the spread of the virus.

Roskill View

Currently, there are a number of nickel projects in Indonesia that are estimated to be worth in the region of US$11Bn and, given the forecast increased demand for nickel in stainless steel and in EV batteries over the next decade, their successful construction and commissioning will be an important factor for the nickel industry. The development of these projects, as well as successful ramp up of existing capacity within the country, are tied to Chinese expertise and progress is likely to be impacted by COVID-19, as Chinese workers who are involved in the construction of high-pressure acid leach (HPAL) plants and nickel pig iron (NPI) smelters are quarantined.

Several of the plants plan to use HPAL technology to produce MHP for use in the EV battery industry. Back in January, the Indonesian government approved environmental impact studies for these HPAL projects, approval of which was considered one of the largest remaining hurdles for their development.

With Indonesia reimposing a ban on the export of unprocessed nickel ores (effective as of January 2020), Chinese NPI producers have lost access to a large proportion of their ore feed. Roskill forecasts that NPI production in China will decline by 17% in 2020, leaving a growing supply gap that the Indonesian NPI industry is looking to fill.

Clearly, uncertainty remains surrounding the long-term impacts of the COVID-19 outbreak on the nickel market. However, in the near-term, its effects are already starting to be felt.

Roskill’s NEW Nickel: Outlook to 2029 and Nickel Sulphate: Outlook to 2029 reports will be published in April 2020, outlining the industry trends and forecasts for the next decade.

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This article was written by Jack Anderson. Please get in touch below if you wish to discuss further:

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