Indonesia’s claim that banning nickel exports spurs downstreaming is questionable – by Krisna Gupta (The Jakarta Post – April 3, 2022)

The Indonesian government has claimed that its raw nickel export ban, which started in January 2021, has shown positive impacts after seeing increases in mining investments and exports of nickel-derived products.

This statement seems to be premature, considering that the government has failed to disclose the data that can support this argument. The Indonesian government has long desired to add high value to domestic mining products, especially nickel, through downstreaming.

Nickel is a major component in electric batteries, which have become increasingly important due to the rising production of various gadgets and electric cars that require energy storage. As the country with the world’s largest nickel ore production and reserves, Indonesia has a vital role in the global nickel trade.

Indonesia produces 1 million metric tons per annum or 37% of the worldwide nickel production of around 2.7 million metric tons. Indonesia has placed a ban on raw nickel exports in hopes of adding value to domestic nickel products. Economists generally discourage market interventions like export bans as they hurt economic efficiency.

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