Ministry of Energy and Mines: 1.2 Million Hectares of Land with Nickel Potential Remaining Unmined in Indonesia's Nickel Mines

Release time: 2024-05-14

The Geological Agency of the Ministry of Energy and Mineral Resources of Indonesia reports that Indonesia has 2 million hectares of land with nickel potential, of which only 800,000 hectares have been mined or mined.

Nickel is listed as one of the 47 important mineral commodities by the Ministry of Energy and Mineral Resources. According to Tri Winarno, Director of Mining Program Development at the Directorate General of Mines and Coal of Indonesia, as of November 2023, Indonesia's nickel reserves are reported to be around 5 billion tons, with 3.5 billion tons of humus and 1.5 billion tons of limonite.

Tri Winarno explained that mechanisms, including regional auctions and allocations, have been developed to increase nickel reserves.

Exploration studies are carried out on designated areas after research organizations have won bids. While it is possible that new nickel reserves may be discovered, the exact locations have not yet been determined.

Tri Winarno mentioned that these areas may be located around Sulawesi. However, as of now, there are no plans for new nickel reserve discoveries.

As of June 2023, nickel is becoming increasingly important in the mining industry, mainly in the production of stainless steel.

The growing shift from gasoline-powered to electric vehicles is further fueling the demand for nickel.

Indonesia is rich in nickel reserves and is the world's largest nickel mine owner.

According to the Nickel Handbook 2020 published by the Ministry of Energy and Mineral Resources (ESDM), Indonesia has nickel reserves of 4.5 billion tons.

In addition, its estimated resources are more extensive, totaling 11.7 billion tons. About 90% of the nickel resources are located in Central Sulawesi, South Sulawesi, Southeast Sulawesi and North Maluku.

The attractiveness of Indonesia's nickel potential has attracted many investors eager to mine and build refineries (smelters).

However, nickel, like coal, is a non-renewable commodity. Over time, continued mining may deplete its resources. Calculating the resilience of nickel reserves requires consideration of refining technology.

There are two types of nickel: high-grade nickel with a content of more than 1.5% (clay) and low-grade nickel with a content of less than 1.5% (limonite).

Nickel humus is processed using pyrometallurgical techniques. As of 2020, ESDM has recorded reserves of 2.6 billion tons of humus.

Pyrometallurgical smelters process up to 95.5 million tons of nickel humus per year, and the life of the humus reserves is estimated to 2047.

As for nickel limonite, reserves amount to 1.7 billion tons, which are processed using hydrometallurgical techniques. The hydrometallurgical plant requires an input of 24 million tons of nickel limonite per year. Based on these figures, nickel limonite reserves are expected to last until 2093, i.e. about 70 years or more.

The Indonesian Association of Mining Experts (PERHAPI) estimates the useful life of the lignite reserves to be approximately 16 years. This calculation is based on geological data reporting reserves of about 3.3 billion tons of humus, with current demand from thermal smelters (RKEF) at about 215 million tons per year.

In comparison, the 1.67 billion tons of limonite reserves and the 60 million tons per year of hydrometallurgical smelter (HPAL) demand suggests that nickel limonite reserves could be depleted in 30 years.

Perhapi chairman Rizal Kasli said, "HPAL products are commonly used as materials for electric vehicle batteries." He emphasized that there are still relatively few smelters processing limonitic nickel due to the relatively high capital expenditure involved.