Indonesian Nickel, World Electric Car Changer Game

Elon Musk was once the richest person in the universe, because Tesla Motors shares in 2020 rose 743%.Even though Elon Musk has only 20% stake in Tesla, it is enough to make him the richest in the world.

To be precise, January 8, 2021, at 10:16 New York time, when Tesla’s share price was US $ 872.36 per share.Tesla’s stock market capitalization alone, could beat the market cap of all Japanese car manufacturers.Extraordinary.

The electric car orelectric vehicle(EV) made by Tesla is a new dream.EV is in accordance with the direction ofworldgreen energy, new renewable energy (EBT) thanks to thepowerthat comes from electricity (stored in car batteries).

The Democratic Party of the United States is very supportive of green energy.So we can be sure, in the current era of President Joe Biden, EV will be increasingly in demand.

Nickel-based car batteries will be a bargaining chip for Indonesia.This is because 24% of the world’s nickel reserves are in Indonesia.

Until 2025, the portion of batteries and electrical components in EV is around 35-40% (battery alone is no less than 25%).Then about 25% in the electric motor.So if the cooperation to produce batteries with LG Energy Solution (South Korea) goes well, the Domestic Content Level (TKDN) of EVs in Indonesia will be large.

To ensure that TKDN, the agreement with LG, Indonesia is represented by the government itself.This is so that the government really takes control of TKDN.After all, the main producer of nickel, PT Aneka Tambang (Persero) Tbk or ANTM is a State Owned Enterprise (BUMN).

Apart from ANTM which is the main producer, a company that also has quite a large nickel reserves is PT Vale Indonesia Tbk (INCO), where the government (Ministry of BUMN) through PT Indonesia Asahan Aluminum (Persero) or Mining Industry Indonesia (MIND ID) controls 20% INCO shares.

Apart from nickel, the raw materials that play a big role in electric cars are tin and copper.Indonesia is lucky, because the producer of Tin, namely PT Timah (Persero) Tbk with the ticker code TINS, is a BUMN.The largest copper reserves in the world, in Papua, are managed by PT Freeport Indonesia, in which MIND ID controls 51.23% of the shares.

The share prices of ANTM, INCO and TINS, which have recently shot up on the Indonesia Stock Exchange (BEI), cannot be separated from the nickel downstream plan.Especially if in February 2021 the Tesla Motors team comes to Jakarta to discuss plans for cooperation in battery production, the world will increasingly know how much Indonesia plays a role in the procurement of global nickel and tin.

Jokowi Stops Exports
If all cooperation in battery production must be “finished” in Indonesia, Indonesia’s bargaining value will be even greater.It is not only foreign investment that will be increasingly heavy, with high TKDN, the price of electric cars in our country (in the future) will increasingly compete with cars that use fuel oil (BBM).

Therefore, President Jokowi’s policy of stopping nickel exports from January 1, 2020, is an accurate policy.The new export tap was opened for nickel processed by domestic smelters, with a high grade.Until the smelter is finished, no export is allowed.

For decades Indonesia only exports raw materials (low grade nickel), we do not enjoy added value.Now it must be processed by domestic smelters.Don’t let the reserves run out, Indonesia will not get added value.

Jokowi’s policy to stop exports has made the European Union inflamed.They complained about Indonesia to the World Trade Organization (WTO).They want to keep obtaining cheap raw materials, they process it, add value to them.

Now, for those who need it, they have no other choice, but to come and produce batteries in Indonesia.After LG, with an investment of US $ 9.8 billion, will follow Contemporary Amperex Technology Co Ltd (CATL) from China, with an investment of US $ 5.2 billion.Not only Tesla, BASF (Germany) is also very interested.

Needs The world’s nickel needs continue to grow.In 2017, around 71% of the world’s nickel was absorbed by thestainless steelindustry.Only 3% for car batteries.However, by 2030, as much as 37% of the world’s nickel will be absorbed by the battery industry.The need forstainless steelwill remain 46%.

In the manufacture ofstainless steel, nickel that is needed is nickel second grade.As for the car battery, what is needed is a nickel to one.Indonesian nickel is first class nickel.

World nickel consumption, which in 2019 was 2.4 million tonnes, in 2040 will be 4 million tonnes.If the amount of production is still as it is now, in 2023 there will be a deficit.Like it or not, production must be increased.Again, this is where Indonesia plays an increasingly important role as the owner of the largest reserves in the world.

On the London Metal Exchange (LME), which is the world’s largest specialty metals exchange, at the end of 2020 the new 3-month contract price was US $ 16,540.On January 19, 2021, the price went up to US $ 18,075, or increased 9.3%.Prices are driven by increasing needs while the amount of production remains, instead decreases, because Indonesia has stopped exports.

Currently, the top 10 nickel-producing countries are the United States, producing 14,000 tonnes per year, Cuba 51,000 tonnes, Brazil 67,000 tonnes, China 110,000 tonnes, Canada 180,000 tonnes, Australia 180,000 tonnes, New Caledonia 220,000 tonnes, Russia 270,000 tonnes, the Philippines 420,000 tons, and Indonesia 800,000 tons.Indonesia has nickel reserves of at least 21 million tons.

As the largest nickel producer and owner of the world’s largest nickel reserves, Indonesian nickel must become a game changer for the world’s nickel demand for electric cars (EV).Right now, when Indonesia wants to process itself through the obligation to build a smelter, the European Union is already inflamed.

When the smelter is finished and the export tap is opened, the government must strictly control the quality of the nickel that comes out, so that we enjoy added value.Also, the market capitalization of companies related to nickel-copper-tin (ANTM-INCO-TINS) will also be higher, along with the profit from processing nickel-copper-lead in cooperation with world electric car manufacturers.