Indonesia's Nickel Exports Soared in 2022, Reaching a Decade High

According to data from the Central Statistics Agency (BPS), Indonesia exported 777,400 tons of nickel throughout 2022, a 367% increase year-on-year (yoy).

The total value of Indonesia's nickel exports in 2022 also surged by 369% (yoy) to USD 5.97 billion. These figures represent the highest record in the last decade, as shown in the graph above.

Throughout 2022, Indonesia exported the most nickel to China, with shipments totaling 661,700 tons.

The next largest buyers were Japan, South Korea, Malaysia, Norway, India, Singapore, Hong Kong, Belgium, and Timor-Leste.

According to Trade Minister Zulkifli Hasan, the surge in Indonesia's nickel export performance in 2022 was due to the policy of banning raw nickel ore exports.

The Indonesian government banned raw nickel ore exports since January 1, 2020. Since then, only nickel that has undergone processing has been allowed for export, thus increasing its price.

"With the nickel (raw ore export) ban, it has incredible added value. Processed nickel exports have grown very significantly. The comparison between products with added value and those without is very clear," said Zulkifli Hasan in a press conference earlier this year (January 2, 2023).

Not only did it boost trade, but the ban on raw nickel ore exports also attracted foreign investment to the nickel processing sector in Indonesia.

This was revealed by the International Monetary Fund (IMF) in its IMF Country Report No. 23/221 released last week (June 25, 2023).

"Since the (raw nickel ore) export ban was implemented, foreign direct investment (FDI) into Indonesia as a whole has performed well. Foreign investment realization in Indonesia increased by 47 percent in 2022, led by sectors related to downstreaming, with almost half of that increase coming from investment from China and Hong Kong," said the IMF in its report.

"Moreover, several foreign investors have built smelters in Central Sulawesi and North Maluku. The realization of investment in nickel and bauxite smelters during 2021-2022 (in Indonesia) reached USD 5.5 billion and USD 3 billion respectively," it continued.

However, the IMF is now urging Indonesia to ease restrictions on the export of raw mineral ores, including nickel.

"Industrial policies should be designed in such a way that they do not hinder competition and innovation, and minimize negative cross-border spillovers. In this context, the (Indonesian) authorities should consider policies to increase value addition in production, by gradually removing export restrictions and not expanding restrictions to other commodities," said the IMF.