Indonesia previously imposed a ban on exports of unprocessed nickel ore. Credit: Francesco Bovolin from Pixabay.

Indonesia has unveiled plans to limit nickel smelters construction to ensure new plants produce high-value products, reported Reuters citing a report by state news agency Antara.

Indonesia Investment Minister Bahlil Lahadalia said the country, which has several smelters that produce nickel pig iron or ferronickel, requires prioritising the use of ore reserves to create higher value materials including materials for electric vehicles’ batteries.

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The news agency quoted Lahadalia as saying: “Now we prefer to push downstreaming with 80% to 100% value addition.”

The country is also considering mandating new nickel smelters to follow green principles during production.

Lahadalia said that new smelters would be powered by green energy, unlike the country’s existing smelters that often make use of coal energy.

The minister added: “Looking forward, we will limit the development of smelters that are not oriented towards green energy.”

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In 2020, Indonesia imposed a ban on exports of unprocessed nickel ore to promote the domestic development of nickel smelting.

Earlier, an Indonesian Energy Ministry senior official said that high-grade nickel ore reserve in the country will last less than two decades if restrictions are not imposed on the construction of smelters.

Last October, Reuters reported that US-based mining company Freeport-McMoRan was in preliminary talks with the Indonesian Government to extend its rights to the Grasberg copper mine past 2041.

Located in the province of Papua, Grasberg is claimed to hold one of the world’s largest copper and gold deposits.