1 Indonesia will become a target country for China's steel exports

On October 20, this Sunday, it will be a historic moment as Indonesia will witness a presidential transition. The incumbent leader Joko, who has served for 10 years from 2014 to 2024, will step down, and Prabowo will take over as the new president for 2024-2029. What are the highlights of this presidential inauguration?

First, the presidential inauguration ceremony will be held at 10 AM on October 20 at the Indonesian Parliament Building. Former presidents, vice presidents, and representatives from friendly countries will attend. Under the presiding of the Speaker of the House, the new president Prabowo and vice president Gibran will take their oaths of office. The new president Prabowo will deliver an inaugural speech, announcing the governance policies and philosophies for the next five years. Typically, after the inauguration ceremony, the president and vice president will participate in a parade celebration on the way from the Parliament Building to the Presidential Palace, interacting with the public.

Second, this inauguration will create a new history for Indonesia. Prabowo will become the oldest president in Indonesia at 73 years old, while Gibran will be the youngest vice president at 37 years old. The ages 73 and 37 are just a reversal of the two numbers. This "old-young pairing" is a first in Indonesian politics.

Third, immediately after the inauguration ceremony on October 20, the new president Prabowo will announce the new cabinet members on October 21. Indonesia's presidential cabinet system gives the president absolute power to appoint cabinet ministers. This cabinet formation is expected to expand significantly, from 34 ministries under Joko's government to 46 ministries under Prabowo, with a considerable number of Joko's cabinet ministers entering Prabowo's cabinet, which largely indicates the continuity of government policies.

The transition of the Indonesian government this time, due to the special relationship between Joko and Prabowo, is considered the most well-prepared and strongest in policy continuity among all previous government transitions. We wish that under the leadership of the new president Prabowo, Indonesia's economy will achieve better development, and the cooperation between China and Indonesia will reach new heights.

2 Joko vigorously develops Indonesia's nickel downstream industry

One of Joko's government achievements is the downstream mining industry, which has become a pillar of Indonesia and successfully increased the added value from raw mining production to mature products. Therefore, it is understandable that Indonesia ultimately gained several times unexpected wealth from this downstream project. Currently, nickel exports amount to 34 billion USD, soaring from 33 trillion rupiah to about 510 trillion rupiah.

The success of the domestic nickel downstream industry stems from the ban on nickel ore exports since 2020. However, it has not been without challenges, as the export ban policy has also faced interference globally, including the European Union (EU) challenging this policy at the World Trade Organization. Although Indonesia lost, this country is a sovereign state, and national interests come first; the government cannot heed anyone's commands. The most important thing now is that Indonesia has begun to develop the nickel industry into a large ecosystem for electric vehicles (EVs), and the dream of building a strong, integrated electric vehicle ecosystem is gradually being realized.

According to data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia's nickel processing and refining facilities (smelters), whether operational, under construction, or planned, have reached a total of 116. This was stated by the Minister of Energy and Mineral Resources, who is accelerating the governance of minerals and coal.

Indonesia has 97 smelters using pyrometallurgical processes or processing high-grade nickel (laterite), and 19 smelters using hydrometallurgical processes for low-grade nickel (limonite).

So far, the total number of available smelters is 116, not to mention the latest smelters. The scale of secondary nickel smelters (pyrometallurgical type) is growing, with plans to build 28 new smelters, and 10 smelters using hydrometallurgical processes are currently in the planning stage. Their respective demands are 130 million tons per year (pyrometallurgical) and 54 million tons per year (hydrometallurgical). Indonesia has 44 pyrometallurgical nickel smelters and 3 hydrometallurgical nickel smelters. According to his data from early 2024, there is still one nickel smelter under construction. There are 25 pyrometallurgical smelters and 6 hydrometallurgical smelters under construction.

Previously, the Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves) revealed that Indonesia currently has nickel metal reserves of about 50-60 million tons. The deputy responsible for investment and mining coordination at the Coordinating Ministry for Maritime Affairs and Fisheries stated that based on this amount, the remaining nickel reserves in Indonesia are expected to last for about 25-30 years. However, with the current nickel smelter projects under construction, the remaining lifespan of nickel reserves is expected to shorten to 20 years. The current issue is production capacity, as approximately 1 million tons of nickel metal is needed for construction, so if the mines are prepared to reach 1 million tons, the capacity may decline, which will reduce the reserves to below 20 years. Their goal is to maintain 20-25 years.

Therefore, the government is also working to develop the electric vehicle battery recycling industry, as at least 99% of nickel can be extracted from this process. They currently have the technology to recover 99% of nickel from used batteries, and Morowali already has a battery recycling facility, with plans to build another one. Thus, in the end, Indonesia will not only produce nickel from mining but also engage in recycling.