March 13, 2023 (MLN): In response to the surging demand for materials used in electric vehicle (EV) batteries, Indonesia's nickel industry is gearing up for a major investment cycle.

According to a commentary published by S&P Global Ratings, Indonesian nickel miners and processors are expected to raise significant capital over the next two to three years to take advantage of the increasing interest from battery firms and carmakers.

Indonesia, the world's largest exporter of nickel, has become an attractive destination for EV battery makers facing a shortage of battery materials. As a result, an array of battery firms and carmakers are investing heavily in the country, joining forces with nickel mining companies such as PT Vale Indonesia Tbk, Aneka Tambang Tbk. PT, Nickel Industries Ltd., and Merdeka Copper Gold Tbk. PT.

In total, companies have already announced approximately US$30 billion in investment in nickel refining and EV battery making in the country.

The investment cycle is set to boost Indonesia's economy and create new opportunities for investors in the nickel industry.

However, the investment cycle also poses some challenges for companies involved in nickel refining. Refining nickel is capital-intensive, and companies are likely to have to turn to external financing to fund their projects. Equity and debt markets will play a crucial role in funding the growth of the nickel industry in Indonesia.

"Refining is the sweet spot. It's where entities get to control the output and pricing of an increasingly in-demand commodity," said S&P Global Ratings credit analyst Minh Hoang.

Despite the challenges, the promise of Indonesia's nickel boom has attracted multinational entities such as LG Energy Solution Ltd. and Contemporary Amperex Technology Co. Ltd. to invest in the country's nickel ventures.

The investment cycle in Indonesia's nickel industry is poised to accelerate the country's transition to a more sustainable economy and help meet the growing demand for EV batteries globally.

Copyright Mettis Link News

Posted on: 2023-03-13T10:15:52+05:00