Indonesia’s electric vehicle batteries dream has a dirty nickel problem – by Rodrigo Castillo, Lilly Blumenthal, and Caitlin Purdy (Brookings Education – September 21, 2022)

Indonesia—the world’s largest nickel miner—is making moves to become a key player in the electric vehicle supply chain. Most of Indonesia’s nickel output is currently Class 2 nickel, a low-purity type used for stainless steel.

The country’s government and the mining sector are determined to transform its nickel industry to meet the rising demand for Class 1 nickel, a crucial component for electric vehicle (EV) batteries.[1] EVs are widely viewed as a pillar of the transition toward renewable energy sources since they typically have a smaller carbon footprint over their lifespan than gasoline-powered vehicles.

These efforts have seen some success to date, with the EV and battery manufacturing sector making investments in the country’s downstream industry (in other words, investment in end-uses of nickel, such as EV batteries), including an EV battery cell plant near Jakarta.

Nickel is a key part of Indonesia’s commodity-led development strategy, in which the country has banned exports of raw commodities to attract downstream investment and catalyze socioeconomic development. The government is planning to tax exports of nickel pig iron (NPI) and ferronickel, which would likely boost production of battery-grade nickel.

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