February 19, 2025
JAKARTA – The Philippines’ possible nickel ore export ban is “a cause for concern” for Indonesia’s smelter industry, experts have said, as they call on the government to intensify diplomacy to secure access to other sources of the commodity worldwide.
Djoko Widajatno of the mining advisory board of the Indonesian Nickel Miners Association (APNI) said Indonesia might turn to countries such as Russia, Australia and Canada if the Philippines restricted its nickel exports.
However, each country would have different logistical and trade challenges that could affect supply stability, said Djoko, who is also a former executive director of the Indonesia Mining Association (IMA).
“As one of Indonesia’s main nickel suppliers, the Philippines’ decision to ban nickel exports could raise concerns for the country’s smelter industry,” Djoko told The Jakarta Post on Thursday.
The Philippines is currently considering a raw nickel ore export ban to boost its domestic processing industry, similar to what Indonesia did years earlier.
If enacted, the ban is expected to take effect in five years to give miners the time to establish processing facilities within the country.
The Philippines’ Congress could ratify a bill banning raw mineral exports as soon as June, Senate President Francis Escudero said on Feb. 6.
Read also: Ministry to curb nickel output to push up global prices
Indonesia imported over 10.47 million tonnes of nickel ore last year, which skyrocketed from just 374,468 tonnes in the previous year, Statistics Indonesia (BPS) data shows, implying its increased dependence on foreign shipments despite the abundance of nickel ore domestically.
Some 97 percent of nickel ore imports last year came from the Philippines.
The Energy and Mineral Resources Ministry has defended these nickel imports, saying they extend the domestic supply of the critical mineral amid depleting reserves.
The ministry estimated in 2023 that Indonesia had over 5.3 billion tonnes of nickel reserves, but with an average production rate of 175 million tonnes annually, that could be depleted in the next 30 years or much earlier.
Tri Winarno, the coal and mineral mining director general at the Energy and Mineral Resources Ministry, said the government would evaluate the impact of a possible Philippine nickel ore export ban.
“If we’re talking about impact, we import nickel from the Philippines, that’s true. But if the Philippines were to ban [nickel ore] exports, we would do some exercises [to measure the impact],” he told reporters in Jakarta on Friday.
Experts have warned that a Philippine nickel export ban could lead to higher international nickel prices, which would translate to a rise in raw material costs for Indonesia’s processing industry and decreased profitability.
Analysts have also suggested that Indonesia could face more competition for investment in the commodity if the Philippines’ nickel export ban helps cultivate its own processing industry.
However, APNI’s Djoko saw this as an opportunity for local industry, as a Philippine export ban could lead to more demand for Indonesian nickel if domestic players could increase their production.
Singgih Widagdo, chairman of the Indonesian Mining and Energy Forum (IMEF), said he expected nickel imports from the Philippines to decline, considering that the government had set this year’s domestic production target at some 220 million tonnes.
“It seems that nickel imports from the Philippines are different from the situation in 2024. Then, [surging] nickel imports from the Philippines were caused by the delay in the approval of the work plan and budget [RKAB], which hampered domestic production,” he told the Post on Friday.
Singgih said there was “no reason to worry” if the Philippines banned nickel ore exports. However, he encouraged the Indonesian government to focus on the development of its domestic downstream nickel processing industry to become more competitive globally.
“With the projected growth in global nickel demand, the Philippines will provide new opportunities in nickel investment for global investors and seek to become [one of] the main [nickel] suppliers for energy transition [technology],” he said.
The Chamber of Mines of the Philippines (COMP) and the Philippine Nickel Industry Association (PNIA) have raised concerns that the country’s export ban could lead to mine closures and layoffs.
Dante Bravo, president of PNIA, said on Feb. 11 that the Philippines’ nickel ore output was expected to recover this year, supported by increased appetite from Indonesia and steady demand from top market China, Bloomberg reported.
The industry is seeing higher demand from Indonesia, where nickel smelters are facing a shortage of ore as a result of government licensing issues, he added.
The Philippines Embassy in Jakarta said in a statement to The Jakarta Post on Monday that the Philippines will remain committed to fostering strong economic and trade relations with its partners, including Indonesia.
“Our policies are guided by the goal of ensuring long-term economic growth, value addition and sustainability in key industries, including the minerals sector,” the embassy said.
“At this stage, discussions on mineral resource policies continue to be shaped by ongoing assessments of industry needs, sustainability objectives and the country’s economic priorities,” it added.