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#Jakarta: #Coal and #Nickel dilemma: Racing for revenue, lagging in readiness

Posted on April 8, 2026 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

A silhouette of Indonesia features an industrial landscape on the left with smokestacks and an oil rig, and a renewable energy scene on the right with wind turbines. Road signs reading 'DEAD END' and 'Hope Ahead' are included.

A potentially widening budget deficit amid soaring global oil prices has prompted Jakarta to explore alternative revenue sources, including export duties on nickel and coal, commodities that are currently benefiting from relatively strong price trends.

The push for rapid revenue mobilization, however, appears to be running ahead of sectoral readiness. President Prabowo Subianto has approved a coal export duty, with tariffs reportedly still under discussion depending on price levels, initially slated for implementation on April 1. However, its rollout remains subject to ongoing cross-ministerial deliberations, particularly regarding its impact on mining sector profitability.

As highlighted by Energy and Mineral Resources Minister Bahlil Lahadalia, the structure of Indonesia’s coal exports complicates policy design. Around 60-70 percent of exports consist of low-calorific, lower-value coal, meaning that a uniform export duty risks disproportionately burdening producers operating on thin margins. This has prompted the minister to adopt a more cautious stance, delaying implementation until a more calibrated approach is formulated. Yet this caution contrasts with parallel intervention on the supply side. The government has tightened production through the Work Plan and Budget (RKAB) mechanism, capping approved output at around 580 million tonnes. This figure is well below the previous year’s realization of 790 million tonnes, aimed at preventing oversupply and supporting global prices.

The escalation of geopolitical conflict in the Middle East has helped sustain elevated energy and mineral commodity prices. Coal prices have remained consistently above US$135 per tonne, while nickel prices have also stayed relatively stable. This sustained price momentum has prompted the government to take strategic measures to safeguard the state budget. Export duty revenues in the 2026 state budget are projected to surge to Rp 42.56 trillion (US$2.5 billion), marking an increase of more than 850 percent. This sharp rise underscores the urgency behind recent policy initiatives.

This creates a fragmented policy mix. While fiscal authorities push for revenue mobilization through export duties, sectoral regulators simultaneously restrict output to stabilize prices. Rather than a fully coherent strategy, the current approach reflects an unresolved tension between short-term fiscal pressures and longer-term industrial and market considerations.

This tension becomes even more apparent when compared with the government’s more assertive stance in the nickel sector. The government is currently formulating an export duty on nickel-based products, particularly nickel pig iron (NPI), although the exact tariff structure and rates remain under deliberation. At the same time, supply-side controls have been introduced, with the nickel ore RKAB capped at around 150 million tonnes to safeguard domestic availability.

#US – #Indonesia deal threatens #China’s ‘entrenched position’ in #nickel market: analysts

Posted on February 24, 2026 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

China will accelerate investment in alternative nickel supply sources and strengthen its role across the metal’s wider supply chain, analysts said, after the United States finalised a deal with Indonesia recently that will give America unrestricted access to the country’s industrial commodities.

While the US Supreme Court’s tariff ruling could add some uncertainty to US-Indonesia trade, the agreement has the potential to reshape the global supply chain for nickel – a metal used to make stainless steel and some electric vehicle batteries.

“[The US-Indonesia deal] is quite important and China will not like it,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at Natixis. “China does have leverage through its big stake in Indonesian nickel mines and could try to retaliate by slowing tech transfers or pulling back investment.”

Indonesia has emerged as a decisive player in the nickel market in recent years, accounting for more than 60 per cent of global mine supply for the metal, according to a Goldman Sachs article published last week.

Chinese investment has supported Indonesia’s expansion in nickel processing capacity, reinforcing the nation’s growing influence on the market, the article added.

The recent rally in global nickel prices – which saw the price of the base metal jump more than 30 per cent between mid-December and January – was largely driven by Indonesia’s decision to restrict how much ore could be mined, Goldman Sachs said.

#Nickel giants #Philippines, #Indonesia form alliance to strengthen regional supply chain

Posted on February 15, 2026 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

Premier nickel industry bodies of the Philippines and Indonesia have entered into a partnership to formalize a regional supply chain corridor, aiming to cement Southeast Asia’s dominance in the global energy transition.

The Philippine Nickel Industry Association (PNIA) signed a partnership agreement with the Asosiasi Penambang Nikel Indonesia (APNI), otherwise known as the Indonesia Nickel Miners Association, to outline the shared direction of both countries’ nickel mining industries.

Under the agreement, the PNIA and APNI sought to promote the IndoPhil Nickel Corridor, a unified platform designed to elevate the global significance of Indonesian and Philippine nickel.

The corridor is envisioned to build investment confidence, encourage policy dialogue, and promote responsible mining, especially as mineral resources are becoming the central component to the global energy transition.

“The corridor signals that Philippine and Indonesian nickel is developed with clearer standards and accountability,” PNIA Executive Director Charmaine Olea-Capili.

By bringing together industry leadership from PNIA and APNI, Olea-Capili said the initiative demonstrates that both the Philippines and Indonesia are committed to building a supply chain that other countries can rely on.

The Philippines is the second-largest producer of nickel in the world, trailing Indonesia. Combined, the two countries are estimated to account for around 75 percent of the global supply of the mineral.

Nickel plays a critical role in supporting strategic sectors such as energy, mobility, and infrastructure, as well as the green and digital transitions.

New tracking system to prevent fraud in #Nickel, #Tin mining

Posted on July 23, 2024 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

The government has launched an online tracking system for nickel and tin shipments to increase state revenue and improve governance in the mining sector. Already implemented for coal shipments since 2022, the Mineral and Coal Information System (Simbara) has now been expanded to encompass nickel and tin and is to be applied to other metallic minerals in the future.

Resource-rich Indonesia is the world’s biggest producer of nickel and one of the largest producers of tin. Simbara will enable the government to track the supply of nickel and tin from mines to domestic smelters. Finance Ministry Budget Director General said the government had launched the online tracking system for nickel and tin shipments given the two commodities’ increasingly strategic role in national and global economic development.