Indonesia weighs nickel smelter moratorium to boost advanced downstreaming

Indonesia's House of Representatives (DPR RI) has expressed support for a proposed moratorium by the Ministry of Energy and Mineral Resources on the construction of nickel smelters that only produce semi-finished goods. Lawmakers argue that the current capacity for Nickel Pig Iron (NPI) is reaching an overload state, which suppresses prices. The goal of the moratorium is to shift investment toward advanced downstreaming, moving beyond 50% to 60% grade processing to create higher economic value through more complex derivatives.

Separately, Deputy Minister of Communication and Digital Affairs Nezar Patria highlighted how Indonesia's critical minerals, specifically nickel and copper, are essential to the global artificial intelligence (AI) industry. These minerals are vital for AI-related infrastructure, including batteries, electrical equipment, and data center resilience. With approximately 62 percent of global nickel production, Indonesia aims to leverage its mineral wealth to support digital transitions and potentially become a regional AI hub, provided it maintains sustainable value chains and environmental standards.