Indonesia to reportedly ratchet up nickel production despite supply glut that is killing WA miners

Another wave of pain is set to wash over WA’s floundering nickel miners with Indonesia set to expand its supply stream of the metal, according to a top government official.

The Financial Times has reported that Indonesia’s deputy co-ordinating minister for investment and mining, Septian Hario Seto, says the Asian country will push ahead with plans to grow its output of nickel.

“We don’t see any reason why we should not expand production of nickel for battery materials,” Mr Seto reportedly said.

“What we want to achieve is price equilibrium. The responsibility for us as the biggest nickel producer is to supply enough nickel so that the EV [electric vehicle] transition can progress smoothly.”

He said the country’s production capacity for battery-grade nickel is expected to quadruple to one million tonnes by 2030.

The price of nickel — which is used in the steelmaking process and for electric vehicle batteries — has nearly halved since the start of 2023 as technological advancements enabled Chinese-backed miners in Indonesia to efficiently transform lower-grade nickel alloys into a more refined product.

Indonesia already controls about half of the global nickel supply and that proportion is set to rise in the coming years, according to a research note in February from leading commodities forecaster S&P Global.

Earlier that month BHP announced it would write-off the entire value of its WA nickel portfolio and then some — equating to $5.4 billion — and was considering switching off the mines, putting 3300 jobs in jeopardy.

The rapid demise of Australia’s nickel industry has been largely centred on WA and already claimed nearly 1200 jobs in the State during recent months.

Since September 2023, WA’s nickel industry has seen five miners close or scale down production, encompassing Panoramic Resources, BHP Nickel West, Wyloo and First Quantum Minerals.