New nickel smelters will be required to use renewable electricity sources

Jakarta – The government will require new nickel smelters with Rotary Kiln Electric Furnace (RKEF) technology using electricity from renewable energy sources. The smelter will produce second-grade nickel products in the form of nickel pig iron (NPI) and ferronickel (FeNi). Nickel pig iron is an aggregate consisting of low-grade nickel ore, coking coal, and a mixture of gravel and sand as an alternative to the use of relatively more expensive pure nickel required in the stainless steel production process.

Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia at the discussion event ‘Building an Electric Vehicle Battery Ecosystem’, said that new smelters with RKEF technology will be prohibited from using coal-fired power plants as their power source.

Furthermore, Lahadalia ensured that the government will no longer provide incentives in the form of tax deductions for new nickel smelters with RKEF technology.

No new investment for RKEF

Minister of Energy and Mineral Resources Arifin Tasrif said that his party has appealed for no more investment in the construction of new nickel smelters with RKEF technology, especially those that produce second-class nickel products such as nickel pig iron (NPI) and ferronickel (FeNi).

Inline with Tasrif, Chairman of the Association of Mining Experts (Perhapi) Rizal Kasli has several times called for the government to conduct a moratorium on nickel smelters if there are no new nickel reserves available in Indonesia.

According to him, the reserves of high-quality nickel ore or saprolite in Indonesia are only enough for seven years at most. As for the type of low-grade nickel ore or limonite, the current reserves can last up to 33 years.

“We have several times suggested a moratorium on the construction of pyrometallurgical smelters because they use high-grade nickel ore, saprolite, which is scarce. If it continues, we are worried that the resilience of nickel reserves is at risk,” said Kasli. He added, nickel demand in Indonesia reaches 460 million tonnes, if all nickel smelters in Indonesia operate both existing and new ones. (Hartatik)

Banner photo: North Morowali, Indonesia. November 2022: Continuation of Furronickel Smelter Construction, production of ferronickel. (Eklesia_Magelo/

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