Anamika Dey, editor
Brief news
- Indonesia has become the world’s largest producer of nickel due to increased extraction, accounting for over 40% of global demand primarily driven by electric vehicle batteries.
- Indonesia’s partnership with China, the largest producer of EV batteries, has contributed to the rapid expansion of nickel production in the country.
- Producers in Australia and Canada have been negatively affected by the oversupply and decreased prices resulting from Indonesia’s increased nickel production, while American companies like Talon Metals are promoting domestic nickel sources and secure supply chains.
Detailed news
As a result of the recent increase in nickel extraction, Indonesia has become the world’s largest producer of the metal. Indonesia is the primary source of over 40% of the global nickel demand, which is primarily fueled by its critical position in electric vehicle (EV) batteries. The country has over 14 active mines.
Jason Sappor, Senior Analyst at S&P Global Commodity Insights, stated that the electric vehicle sector requires nickel to develop, which will have a positive impact on the environment and the global economy’s transition to a greener model and the achievement of climate change objectives.
Indonesia’s partnership with China, the world’s largest producer of electric vehicle batteries, is a significant factor in the rapid expansion of nickel production. Indonesia’s mining capabilities have been enhanced by Chinese investments, which have prioritized the local refining of nickel in response to a 2022 prohibition on unprocessed nickel exports. Water pollution and deforestation in the vicinity of mining sites are among the environmental concerns that are on the rise, despite the economic advantages.
Producers in Australia and Canada have been adversely affected by the oversupply and decreased prices that have resulted from the increased production of nickel in Indonesia. Talon Metals and other American companies are promoting the development of local nickel sources under strict environmental standards, partnering with manufacturers such as Tesla, and promoting battery recycling to meet the increasing global demand for EVs and renewable energy. As a result, they are advocating for secure supply chains.
Todd Malan, Talon Metals’ chief external affairs officer, stated, “It is entirely logical that we would encourage these companies to source from the resources that are available domestically and through our free trade allies.” “It is manufactured to a high standard.” The cost of conducting that procurement is slightly higher, but it is not so significantly higher that it will affect the vehicle’s price.
During a post-earnings call in 2020, Elon Musk, the CEO of Tesla Inc, urged miners to increase nickel production.
Elon Musk requested that mining companies increase their nickel production. “If you mine nickel in an environmentally conscious manner and efficiently, Tesla will award you a substantial contract for an extended period.” I am hopeful that this message reaches all mining companies. Please obtain nickel.
In the interim, the United States is confronted with substantial obstacles in terms of its nickel supply, as it is dependent on a single operational mine in Michigan. In 2023, the United States mined 17,000 metric tons of nickel, while Indonesia produced 1.8 million metric tons. Talon Metals has been engaged in the development of a new nickel mine in Minnesota; however, the process of achieving complete production may require decades.
Source : CNBC News
