The mining sector gained 3.34 percent year-to-date (ytd) to become the sole index out of nine sectorial indices on the Indonesia Stock Exchange (IDX) to book positive growth, the bourse’s data showed on Tuesday.

Other indices have booked negative growth so far this year, with agriculture and consumer goods falling respectively 18.42 percent and 8.44 percent. Meanwhile, the Jakarta Composite Index (JCI) also remained 9.5 percent down in value as of Tuesday.

“Expectations over recovery in manufacturing activities drove potentially higher demand” for mining products and generated positive sentiment for mining stocks investment, analyst Robertus Yanuar Hardy of Kresna Sekuritas said on Tuesday.

Countries around the world have begun restarting several industries entering the fourth quarter even as many continue to battle the pandemic. These “restarts” have driven up demand and prices for raw materials, including metals and coal that are among Indonesia’s top exports.

Statistics Indonesia (BPS) data show that mining exports reached US$1.55 billion in October, up 16.98 percent from September in the sharpest rise compared to its three other major export industries: oil and gas, agriculture and manufacturing.

Big metals companies led the rise in the mining index as their commodities’ prices began recovering much earlier than coal prices.

Nickel and tin prices began rebounding in March-April while gold prices surged throughout the year, but coal prices began recovering only in August-September, according to the London Metal Exchange (LME) and ICE NewCastle Coal.

Similarly, publicly listed nickel miner PT Vale Indonesia, state-owned tin miner PT Timah and state-owned gold miner PT Aneka Tambang saw their respective share prices rise 57 percent, 128.13 percent and 133.98 percent over the last six months, excepting a sharp dip in late March.

Investment analyst Dessy Lapagu of Samuel Sekuritas told The Jakarta Post that the rise in nickel shares were particularly driven by the government’s plan to mass produce nickel-rich electric vehicle batteries (EVBs).

Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan recently said that the government was slated to sign a deal to form a holding company with South Korea’s LG Chem, the world’s second biggest EVB maker, to mass produce the car batteries.

“Nickel is expected to become an alternative to the coal industry that has all this time been a major contributor to the mining sector,” said Dessy.

Nickel, a key component in EVBs, has greater long-term market potential than coal, particularly as big economies lay down plans to use more electric vehicles (EVs) and slow development of coal-fired power plants, the biggest market for coal.

A case in point is US president-elect Joseph Biden’s promise to push for EV adoption in the world’s largest economy and to prohibit the country’s credit export and development aid agencies from financing new coal-fired power plants.

Nonetheless, global coal prices rallied in the past few days as news spread that China was opening up to new coal imports. China is the biggest coal buyer in the world and the top destination for Indonesian coal.

PT Bumi Resources and PT Indo Tambangraya Megah, publicly listed companies that are among Indonesia’s most productive coal miners, saw their respective shares rise 44 percent and 38.7percent in October on the back of rising coal prices due to growing demand as winter approaches.

Energy research consultancy Wood Mackenzie said in a statement on Monday that it projected 10 million tons of Indonesian coal to arrive in China next month. The figure represented half of China’s estimated total coal imports for December, with Russia and Columbia potentially covering the remaining import demand.

China aims to increase coal imports to lower domestic prices. It foresees a spike in demand during the winter months, but Chinese coal miners have been struggling to raise outputs following several mining accidents.

“[The imports] will work to ease domestic prices and strengthen seaborne prices,” Wood Mackenzie senior consultant Yu Zhai said in the statement.